Corporate Responsibility, Seen Differently…

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Website: www.mmO2.com/cr/report2004 2

E-mail: [email protected] plc Corporate responsibility report 2004 Telephone: +44 (0)113 272 2000 Corporate responsibility report 2004 mmO2 plc Legal and Corporate Affairs Corporate Responsibility Global Reporting Initiative Cautionary statement regarding forward-looking statements Wellington Street mmO2 plc has elected to present this Corporate Responsibility report This document contains certain forward-looking statements. by following the guidelines of the Global Reporting Initiative (GRI) We may also make written or oral forward-looking statements in: Slough, Berkshire (www.globalreporting.org). GRI has produced Sustainability Reporting SL1 1YP – our periodic reports to the US Securities and Exchange Commission, Guidelines (2002) using a set of ‘core’ and industry-specific indicators. United Kingdom also known as the SEC, on Forms 20-F and 6-K; The latter include those for the Telecommunications sector. In addition the – our annual report and accounts and half-yearly reports; Registered No. 4190833 GRI has defined five conditions that an organisation’s report must meet to – our press releases and other written materials; and be ‘in accordance’ with the guidelines. This report has been independently – oral statements made by our officers, directors or employees assessed by Dr. Malcolm A. Shaw – it clearly follows the 2002 guidelines and to third parties. is in accordance with them. This analysis, cross-referenced to the report’s content, can be found within each section of this report and in greater We have based these forward-looking statements on our current plans, detail on the website at www.mmO2.com/cr/report2004. expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us. Forward-looking statements speak only as of the date they are made.

The mmO2 plc Group report has been edited Statements that are not historical facts, including statements about our beliefs and approved by Plain Language Commission. and expectations are forward-looking statements. Words like ‘believe,’ ‘anticipate,’ ‘expect,’ ‘intend,’ ‘seek,’ ‘will,’ ‘plan,’ ‘could,’ ‘may,’ ‘might,’ ‘project,’ ‘goal,’ ‘target’ and similar expressions often identify forward-looking statements but are not the only ways we identify these statements.

These statements may be found in this document generally. Our actual results could differ materially from those anticipated in these forward-looking statements Corporate responsibility, as a result of various factors, including all the risks discussed in the above- mentioned reports, releases and statements.

If any one or more of the foregoing assumptions are ultimately incorrect, our actual results may differ from our expectations based on these assumptions. Also, the sector and markets in which we operate may not grow over the next several years seen differently… as expected, or at all. The failure of these markets to grow as expected may have a material adverse effect on our business, operating results and financial condition and the market price of our ordinary shares and American Depositary Shares.

The information on our website, any website mentioned in this document or any website directly or indirectly linked to our or any other website mentioned in this document is not incorporated by reference into this document and you should not rely on it.

Design and Production: salterbaxter Writing and Research: Simon Beavis Photography: Group report: George Brooks. Operating business reviews: John Edwards

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Design and Production: salterbaxter Writing and Research: Simon Beavis Photography: Group report: George Brooks. Operating business reviews: John Edwards

mmO2 plc a brief summary on corporate responsibility Highlights: Position in the BITC Corporate Responsibility Index:

• We made a pre-tax profit of £95 million for the year ended Having reported on our corporate responsibility 31 March 2004, our first-ever profit following our formation in November 2001. 32 activities for the first time last year, we have spent • Our customer base exceeded 20 million for the first time, with more customers joining our network in each of our markets. Increase in phones we have this year maintaining our focus particularly on three recycled through the Fonebak scheme • In 2004 we were recognised by Oftel as having the best- in 2003/04: key areas: performing network in the UK.

• O2 Airwave rolled out its secure radio service to 35 police forces in mainland Britain and is on schedule to supply all 51 forces by + • Listening to people, both inside and outside O2, March 2005 along with other public safety agencies. 71,000 to make sure they find we are doing the things that • We published child protection leaflets on six different topics. Amount of electricity from renewable work and are most relevant. • Employee engagement – measured through the annual Reflect sources in the UK:

O2 survey – increased by 2 percentage points to 73 per cent during the year. • Improving in the areas of weakness identified last year. • During the year we donated £1.7 million in funding and 20% in-kind donations to charities and charitable causes.

Increase in full-time employees • Embedding corporate responsibility throughout our working in our call centres in the UK: business so that it is not just about process and box- ticking but that it is actually real and effective in all + our operating businesses, at all levels. 18%

Reduction in CO2 emissions: - 8% No opinion Poor/very poor 2% 2% Proportion of participants in the asthma Very good trial who said they were satisfied with Average 17% being able to manage their asthma 26% symptoms by using the Xda by O2 for monitoring:

Quite good 53% 78%

How employees rate O2’s performance on corporate responsibility 7630_CORE 5/7/04 12:03 pm Page a

Group report

Looking at

the picture 7630_CORE 5/7/04 12:04 pm Page b

Chairman’s statement Mobile in society

“We firmly believe that the mobile sector is making a significant contribution to society and that mobile services enrich people’s lives.” Contents David Varney, Chairman mmO2 plc

01 Chairman’s statement It’s only just over a decade since the first technology works and tell them what we strong and growing stronger. Our 02 Chief Executive Officer’s statement GSM mobile phones became generally are doing to make sure we operate safely. challenge, as Peter Erskine describes over available, and even fewer years since they the page, is to make sure it informs the 03 Action to address key issues But it is just as important to anticipate 04 Responding to concerns about mast siting were regarded merely as an accessory of way we operate as a business, every day. the young and affluent. concerns as it is to react to them, and to 06 Engaging with employees take an active role in identifying solutions. 08 Responding to child protection Some 119 million people in the markets That’s why last year we opened the debate 10 mmO2 plc Group overview where we operate now own a mobile 11 Our approach to corporate responsibility phone. People of all ages see the mobile on child protection and mobile phones, 14 ABI disclosure guidelines on social responsibility phone as an essential part of their home alerting people to the risks of children 15 Business Principles and work lives. As an industry we have making inappropriate contacts or seeing pornographic content. We have actively David Varney, 16 Strategic objectives come from virtually nowhere to a position Chairman mmO2 plc where we are contributing £22.0 billion to been promoting safe ways for children 30 June 2004 17 Introduction to our performance the UK economy alone – 2.2 per cent of and their parents to stay in touch through 18 Marketplace gross domestic product. their mobile phones. The debate on child 21 Health protection has been taken up by the entire 23 Environment and sustainability We firmly believe that the mobile sector is industry. We have continued our own 27 Workplace making a significant contribution to society efforts to reinforce the message through, 30 Community and that mobile services enrich people’s lives. for instance, a series of child protection 33 Manx Telecom leaflets on such issues as bullying and the Mobile is being used in many beneficial safe use of mobile chat rooms. 34 Group targets ways, clearly demonstrating its social value. 36 Assurance statement During the year we published ‘Options – We are pleased that our efforts are widely mobile technology in public service’ which recognised in society. We are represented in included 100 innovative ways that mobile some of the main sustainability indices and technology is being used in public services. investment funds, such as the Dow Jones The examples were varied and included a Sustainability Indexes and the Business in blood donor matching scheme in India and the Community Corporate Responsibility a motor breakdown system using text for Index, and have received some encouraging drivers who are deaf or have speech feedback from opinion leaders. Seeking impediments. outside endorsement is important for us – we want help in making sure our initiatives We know that many have concerns strike a real chord with the people and about the safety of handsets and mobile communities we serve. My belief is that communication masts. We hope this report responsible companies are more likely to will help to reassure stakeholders that, in prosper and thrive. this, and many other areas, we take our responsibilities seriously. Our approach is This is my last corporate responsibility

to engage with people to explain how the statement as Chairman of mmO2. I know that the commitment to corporate responsibility across the Company is

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Chief Executive Officer’s statement Corporate responsibility in our business Action to address key issues [GRI Reference: this section covers 1.2, 3.1] [GRI Reference: this section covers 3.10, 3.11, 3.12, SO1]

“…it is often the things which During 2003/04 we continued to engage with stakeholders, actively instigating debate about new issues and responding to are hardest to see which make real concerns. In this section of the report we describe the action we have taken in three specific areas. They are: the most difference.”

Peter Erskine, Chief Executive Officer mmO2 plc

We made it our priority in 2003/04 to From the outset we were determined to responsibility agenda across the Group. We ensure our approach to corporate adopt the ethos of corporate responsibility know from research among employees this Mast siting As a growing business with an expanding network, we aim to consult responsibility was consistent and properly and create a robust framework for our year that this is their preferred path and I am communities on where we site our communication masts and to give local authorities and interest understood at every level within mmO2. activities. We set ourselves the target of determined we will continue to take it. I am pleased that, while we still have more pursuing best-in-class corporate governance, groups advance information on our development plans in line with best-practice guidelines. to do, we have made real progress in ensuring that we weigh the social, This report has been prepared in accordance We have signed up to the industry’s codes on responsible mast siting. Our performance against achieving this goal. environmental and ethical impacts of the with the 2002 GRI Guidelines. It represents business in managing risks to the Group. a balanced and reasonable presentation of the code for UK operators, called the Ten Commitments, was independently reviewed in 2003. Often companies are judged by what’s our organisation’s economic, environmental O has worked hard to address people’s concerns, but we know we have more to do. most visible. I am tremendously proud of This is not, perhaps, the most evident and social performance. The report includes 2 some of our high-profile activities in the aspect of corporate responsibility. Yet specific country supplements to give greater last financial year. Simple and effective it is vital. It enables us to mitigate risks to insight into our operations in different campaigns – like the award-winning ‘Teach our reputation and brand, and identify markets. We aim to improve our reporting UR Mum 2 TXT’ with Milly’s Fund in the UK, opportunities to differentiate ourselves from continually and welcome your feedback, Feedback from employees We want our employees to feel proud to work for the SCHOLA-21 project in Germany and our our competitors based on genuine dialogue ideas and comments. Our contact details O2. Our success depends on their talents and skills and we are committed to treating them in a continued support for asthma trials using with our stakeholders. can be found on the back cover of this our Xda device – demonstrate how we report, which I hope you enjoy reading. way that reflects our core values – to be bold, open, trusted and clear. Our employees have told can bring mobile technology and our skills I’d like to highlight one particular area us what makes O2 special and also where more needs to be done to improve our business. Our together in innovative ways to enrich society. where we have made progress on this. employees have said what corporate responsibility means to them and how we should ensure Yet where corporate responsibility is For the last two years our corporate concerned it is often the things that are responsibility programme has been overseen that we abide by the high standards we set ourselves. We are taking steps to make sure managers hardest to see that make the most by the mmO2 Corporate Responsibility across the Group have the right tools to deal with the many sensitive issues involved in running difference. Advisory Council, under David Varney’s leadership. Thanks to our progress, we Peter Erskine, a modern mobile operator. Chief Executive Officer mmO2 plc Corporate responsibility challenges decided the time was right to transfer 30 June 2004 conventional commercial thinking. It its work to the Company’s Executive pushes companies to assess their impact Committee and to the individual business beyond financial performance and to run units. This is the clearest signal we can give Child protection We were among the first to alert people to concerns about themselves in a way that benefits society of our determination to integrate and and protects the environment. embed corporate responsibility into the pornography, inappropriate contacts on mobile phones, and the dangers of mobile-related bullying very bones of the business. Our commercial success depends on and crime. Now we are concentrating on ways to help young people use their mobiles safely, how we behave as a company. Companies This move should help the individual and providing information to parents to improve their knowledge of mobile technology and its that win trust by being open and direct operating businesses to define goals that in all aspects of their business can build meet local expectations, meet customer capabilities. The feedback from some of our campaigns – like ‘Teach UR Mum 2 TXT’ – important links with the very people they needs and translate them into appropriate has been very encouraging. depend on: their customers, employees, action in the UK, Germany, Ireland and shareholders, suppliers, interest groups, the Isle of Man. See over for what we are doing... local and national governments, regulators and investors. I am confident that this and other initiatives will help to promote an awareness of our

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Responding to concerns about… Mast siting [GRI Reference: this section covers 2.9, EN7, EN25, PR1, IO3, IO7, PA8, TA1]

Some people have expressed their concerns about where we locate our communication masts for our networks. We take these concerns seriously. We aim to develop our infrastructure responsibly and make efforts to inform people in advance of our plans. We aim to listen, consult and respond. “We would urge you to reconsider

“We are building a lot less now the siting of this mast because the than three years ago, but the level local community is very upset.” of community consultation is far Catherine Kiely, greater today.” Thorneywood, Nottingham, UK

Jim Stevenson, Community Relations Manager, O2 UK

O2 responded to this letter and we are continuing our discussions with the local community in Thorneywood.

What we are doing to Providing early information Mast sharing Safety Environment O2 Airwave Measurements by safety regulators To minimise the visual, noise and O2 Airwave has completed over reassure the public Every autumn we publish a list Wherever possible we try to in the UK and Germany have shown environmental impact of our masts two thirds of its programme to build A team of community relations of the UK sites we plan to develop work with other operators to share that our masts and base stations we work to a checklist when a secure network across mainland operate well below international extending our network in sensitive Britain, a process that has involved managers works in each of our in the coming year. This helps masts so there is less impact on safety limits, often by many areas, such as close to schools or in extensive consultation. hundreds or even hundreds of places of natural beauty. Where we businesses and their job is to make local planners to work with our the environment. We entered into The recent completion of the thousands of times. Our masts are may harm biodiversity or create an sure local communities are informed community relations teams in groundbreaking 3G network sharing network on the Gower peninsula well cordoned off with clear safety eyesore, we work to find alternative in South Wales involved countless of where we plan to build masts. addressing potential problems. agreements with T-Mobile in the signs to warn people not to get sitings or to mitigate the impacts. meetings with councillors, Welsh close to antennae. The National We have signed up to the mobile We attend public meetings, consult UK and Germany. Through these Assembly members, Members of Radiological Protection Board in the phone industry’s Ten Commitments through drop-in sessions, distribute agreements we commit to sharing Parliament and local campaigners – UK has issued new recommendations on responsible mast siting in the UK who were invited to help us choose information leaflets and operate a our infrastructure, which reduces on safety procedures for people and a similar code in other countries appropriate mast sites. In Scotland, working on masts. We are reviewing of operation. This commits us to dedicated helpline for queries on O2 the environmental impact of our extensive briefings were given to our practices and expect to make consulting communities on our UK’s mast siting (see pages 21-22). 3G network roll-out. planning officers, members of the some small changes to make sure plans openly and in good time. Scottish Parliament and interest we comply. groups. The network building programme has gained significant community support and very few Jim Stevenson, cases of local opposition.

Community Relations Manager, O2 UK 04 mmO2 plc www.mmO2.com/cr/report2004 mmO2 plc 05 7630_CORE_2 5/7/04 3:12 pm Page 6

Engaging with…

Employees Here are some of the actions we have taken this year:

Diversity

We created a new diversity steering group for O2

chaired by Danuta Gray, O2 Ireland’s Chief Executive Officer, who acts as diversity champion for the whole We want everyone at O to feel proud of business. One key aim is to make sure our managers 2 really understand the many complex issues involved in creating a diverse workplace and using our intranet working for the Company. Last year we surveyed as a management training tool. Corporate responsibility at every level employees to see what they think about our In 2003/04 the management and oversight of corporate responsibility was transferred from a dedicated council to the Executive Committee and the operating approach to corporate responsibility, and they businesses. This was to ensure that we integrate corporate responsibility to every level of the business. said there were things we could do better. One issue was to pick campaigns that were socially important in their own right – without any immediate commercial value to the Company.

Understanding the views commitment did not go right through How we are responding the Company and was strongest at the of our people With the restructuring of our very top and at grass root level. Some business we have devolved day-to-day Between October 2003 and January 43 per cent of the quantitative online management of our corporate “I would like it if people said: That’s refreshing. 2004 we used external experts to survey survey said we were not good at responsibility agenda to our individual employees’ attitudes to corporate communicating our policies inside the businesses. At the same time we have responsibility. In total 347 employees Company, and this was given as a reason That’s different. They’ve taken on something as transferred the responsibilities of the were canvassed across the business – why corporate responsibility has yet to 272 through an online survey and the Corporate Responsibility Advisory be embedded within O2. rest through focus groups and interviews. Council to the Executive Committee hard or as tough as that and made a difference.” Nearly half of the respondents to the Several respondents urged us to be and the individual operating businesses. online survey said it was important for bolder in our campaigns and to pick We believe these two actions will O2 employee companies to help create a better society tough topics for our campaigns – like strengthen our commitment to corporate and 89 per cent said large companies child protection, an issue we are leading responsibility at every level and improve should do more than focus on profit. the industry in addressing. our performance. The new strategic objectives we have set will also increase Each year in October we run our Most thought O2 was committed to our focus and performance and will be corporate responsibility and that we did employee engagement survey, Reflect carefully measured – just as we measure it well. But there were concerns that the O2. The results for each function are our business performance. benchmarked against each other and senior management have performance targets linked to this survey. Each survey is followed by action plans that are published on our internal website.

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Responding to… Teach UR Mum 2 TXT Our campaign with Milly’s Fund “O2’s production of a range of information in the UK is designed to help Child protection parents and carers to stay in touch [GRI Reference: this section covers PR2, PA7] with young people in a safe and leaflets and co-operation with other unobtrusive way. We have printed leaflets and run text clinics in operators to launch a UK code of practice shopping centres around the UK.

We aim to be proactive in alerting parents and their children to the potential Nuisance call bureau and to classify adult content are very In the UK we run a nuisance call dangers of mobile phones and all the ways to use them more safely. bureau. Employees within this welcome indeed. This is tangible and operation work closely with the During the year we published a series of leaflets to tell them about mobile agencies that monitor our chatrooms to make sure they are not being used practical social responsibility and it’s by people trying to make inappropriate services and launched the highly successful ‘Teach UR Mum 2 TXT’ contact with young people. The trained moderators also listen for campaign as a safe way for young people to stay in touch with their parents. backed by a willingness to continue children who are distressed, referring working with organisations such as them to agencies like the Samaritans. Code of conduct Operators in the UK and Ireland National Confederation of Parent Teacher have developed codes of practice for the responsible and secure use of mobile services. We are proposing Associations to promote the safe use a similar code in Germany. The UK code covers visual content, online of mobile phones to both young people gambling, mobile games, chatrooms and internet access. Certain commercial information will be and their parents.” classified as 18 and users will need to prove that they are old enough David Butler, Chief Executive, National Confederation of Parent Teacher Associations before being allowed access to this content. Parental controls will also be made available for internet content. We are developing age verification processes so we can ensure proper controls under the UK code. These controls will be relevant and useful in other future contexts such as location services, gambling, betting, lottery and e-money transactions. We aim to implement the UK code WHAT TIME by December 2004. WILL U B HOME? Child protection leaflets:

What your child’s mobile Bullying on mobile phones Sensible use of camera phones Helping children deal with Chatrooms Crime phone can do This leaflet on bullying tackles a very Camera phones are becoming more and nuisance calls This leaflet deals with how children Mobile phones are valuable. When This leaflet aims to help parents and important problem some children face. more popular. Used appropriately they Children with their own mobile phones can use chat services safely when talking they get stolen, children are often the guardians understand mobile phone Bullying is never acceptable. It can leave can be both useful and great fun. But may occasionally receive unwelcome to friends they may not know in the victims. Our leaflet on phone crime gives technology. It describes the full range of a child feeling frightened and alone. used irresponsibly they can cause distress calls or texts. Sometimes these are from real world. All our chatrooms are tips on how to avoid drawing attention capabilities that modern mobile phones The leaflet tells them who to contact if and may invade someone’s privacy. This people they know. Sometimes they are carefully monitored to listen for people to themselves when using their phones, have and also alerts them to the harmful they are being bullied and how the law leaflet looks at how to use them safely from complete strangers. Such calls trying to make inappropriate contacts and alerting them to the dangers ways that some people try to use services, can protect them. and respectfully. and messages can be frightening or with young people. around them. covering such issues as chatrooms and threatening. This leaflet gives parents grooming by paedophiles. and carers ideas about how to counsel children on dealing with nuisance calls.

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mmO2 plc Group overview Our approach to corporate responsibility [GRI Reference: this section covers 2.1, 2.2, 2.3, 2.4, 2.5, 2.7, 2.8, 2.14, 3.18, EC1, EC2, IO1, PA6] [GRI Reference: this section covers 1.1, 2.9, 2.11, 2.12, 2.13, 2.14, 2.17, 2.18, 2.20, 2.21, 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.8, 3.10, 3.11, 3.12, 3.13, 3.19, SO1]

Financial highlights – continuing operations mmO2 plc is a leading provider of mobile (Year ended 31 March 2004)

communication services in the UK, Germany Group turnover and Ireland.

We also provide secure communications for police forces and other public safety services in £5,646m England, Wales and Scotland through O2 Airwave and a full range of fixed and mobile communications on the Isle of Man through Manx Telecom. The mmO2 Group was formed in 2001 through a demerger from British Telecom. In June 2003 we completed the sale of Service revenue O2 Netherlands.

In the year to 31 March 2004, mmO2 recorded a pre-tax profit of £95 million. Turnover from continuing operations was £5,646 million (2003: £4,611 million). The Group employs 12,905 £5,030m employees across its international operations. In 2003/04 we saw our customer base exceed 20 million for the first time. We now offer global Reporting on corporate responsibility Responsibility Forum that brings together we manage social, environmental and ethical roaming services in 161 countries. We are a leader in mobile data services for use in business, 1 Corporate responsibility informs how we practitioners from across the business. risks in reference to the ABI guidelines is leisure and entertainment. Last year a total of 11 billion text messages were sent and received EBITDA operate as a company and how we relate Starting in June 2004 our corporate available in our Annual Report and on page across our networks. to society at large. Our objectives are responsibility activities are reported to 14 of this report. The O brand expressed through explicit corporate the Executive Committee every quarter 2 How we manage risk All the operating companies trade under the O2 brand name, with the exception of Manx £1,367m responsibility targets for the business, which and to the main Board twice a year. To ensure that our own risk-management Telecom. Today, two years into its new life, O2 has achieved brand awareness levels between are outlined on pages 34-35. Through this 51 and 72 per cent in all markets. we aim to take full account of the social, Corporate governance procedures are thorough we explicitly assess environmental and ethical impact of our When O2 was first formed in November the value at risk and our appetite for The operating businesses 2001, we made it a priority to establish a specific risks. A Group-wide risk register is 2 operations, within a risk management and Our customer numbers in the UK and Ireland continue to grow, with the UK reaching 13.3 million Capital expenditure governance system, and to make a positive lead in corporate governance. The work we mirrored by separate risk registers for each of at 31 March 2004, an increase of 10 per cent, and 1.39 million in Ireland, up by 11 per cent. contribution to our business and society. have done over the last two years means the operating businesses and headquarters Both have a good share of high-value customers, and growing revenues from data services. we now have a system of governance that functions. Engaging actively with stakeholders that is robust and among the best. O Germany’s growth continued in 2003/04. It added nearly 1.2 million new customers, the 2 £1,213m are affected by the business is an important Individual Directors within the Group majority of which were on higher value post-pay contracts, and significantly increased its part of our corporate responsibility approach. It is important to get this right. Corporate have responsibility for the different risks we EBITDA margin to almost 15 per cent. responsibility can only flourish in an face and are responsible for devising and This is our second corporate responsibility environment where internal control and implementing remedies where possible. O Airwave has a £2.9 billion, 19-year contract from the UK Government to supply secure 2 report. The online version is available at governance procedures are rigorous and They are encouraged to assess the social, communications to all police forces in mainland Britain. By 31 March 2004 O Airwave had Year-end net debt 2 www.mmO2.com/cr/report2004. In well-managed within a wide-reaching risk environmental and ethical impact of our rolled out services to 35 police forces with over 50,000 police officers. addition, our Annual Report and Annual management system. actions in managing risk. All new appointees During 2003/04 Manx Telecom was awarded a 15-year licence extension two years ahead Review contain information on our to the Board take part in appropriate training Risk management is about identifying, of schedule. £366m corporate responsibility approach and on for their role including those risks of social, how we manage corporate governance. measuring and controlling issues that environmental or ethical nature. Many of our customers, using our higher speed 2.5G service (GPRS), this year began to use could damage our revenues, assets, mobile phones not only to make voice calls and send text messages, but to download games Managing corporate responsibility brand, reputation and value. It is also Risks are assessed by the Executive and music, watch video streams, surf the internet and send e-mails. Customers We want corporate responsibility to sit in about identifying opportunities to enhance Committee every month and twice a year the mainstream of our business. We have those things and differentiate ourselves by the Board, which currently comprises All our mobile businesses have also secured licences to offer a new generation of Universal therefore decided to absorb the work of from competitors. Companies that manage four Executive Directors, seven Non-executive Mobile Telephone Services (UMTS), or 3G, services which will offer more sophisticated data the former Corporate Responsibility risk well are generally regarded as more Directors and a part-time Chairman. applications including high-resolution video. 20.7m Advisory Council into the work stream of likely to prosper for the good of their Our strategy the Executive Committee, where Directors customers, employees, suppliers, investors Our main aim is to become an integral part of our customers’ lives by providing relevant, already individually champion different and society generally. highly usable services that they truly value through a range of tailored packages. aspects of corporate responsibility. Employees The social disclosure guidelines of the Achieving our strategic goals depends on our employees’ performance and skills. We continue In addition, we have devolved day-to-day Association of British Insurers (ABI) and the to concentrate on improving our capabilities in customer care and to develop our brand in management of corporate responsibility to Turnbull Internal Control Guidance on the dynamic ways that reflect our brand values – to be bold, open, trusted and clear. our individual operating business units, each Combined Code oblige companies to state 12,905 of which now has a designated Corporate how they are managing risk. We fully 1 EBITDA is our earnings before interest, tax, depreciation, amortisation and exceptional items, excluding our share of Responsibility Manager. The corporate support these requirements and have operating profits and losses of our joint ventures and associates. 2 responsibility activity across the Group is published the ways that we meet them in O2 UK £502 million; O2 Germany £391 million; O2 Ireland £52 million, O2 Airwave £243 million and other businesses £25 million. monitored through the monthly Corporate our Annual Report. An overview of how

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Our approach to corporate responsibility (cont)

Policy-based performance

Direct Business short-term peer-based financial norms impacts

Societal Stakeholder norms (regulatory behaviour & non-regulatory) and concerns

Table 1 – Five-Part Materiality Test (source: AccountAbility)

Our internal audit team reviews the In 2003/04 we improved our position – Research of O2 opinion leaders through by the Executive Committee. To ensure Test 1: Direct short-term Short-term financial impacts - E.g. Pricing regulation implementation of the risk management in the UK-based Business in the Community one-to-one interviews; that we will meet our objective of financial impacts resulting from aspects of policy at all levels of the Company and Index on Corporate Responsibility which this creating a credible report, the process has social and environmental reports independently to the Audit year saw 139 companies take part, including – Research of some 300 employees been reviewed by our external assurance performance. Committee of the Board. We have a fast- 56 of the top 100 UK-listed companies. through interviews, focus groups and providers. We have adopted this approach track risk management system which enables Overall we were ranked 32nd and were the online surveys; to continuously improve the quality and Test 2: Policy-based Policies that are core to - E.g. Corporate performance our business rather than governance, Customer us to deal quickly and effectively with any leading mobile communications company –Sector-wide research of the British public; usefulness of our annual corporate risks that are material to our business. with an improved score of 91.21 per cent responsibility reporting. add-ons. care, Procurement, against 82.49 per cent in the preceding –A dedicated conference for some 30 Environmental, and Senior management, including Directors, year. We improved our score in all assessed corporate responsibility practitioners The table on the right describes examples Employee policies have the responsibility for managing of areas that would be captured through categories and recorded above-average within O2 that included stakeholder Test 3: Business peer-based Issues that our peers are - E.g. Siting of risks, which includes those of social, scores in all areas. mapping; and the Five-Part Materiality Test. environmental and ethical nature. Risk norms deeming to be important. communication masts management is taken into account in Areas highlighted for some improvement – Media reviews and publicly available Reporting guidelines and antennae determining their remuneration. But with include increased training in corporate opinion leader research. This report covers all of our core activities that are fully owned, excluding our joint - Research into potential management of risk occurring at many responsibility for all employees including Through our research activities we aimed health effects of mobile different levels within the Group, other Directors; inclusion of social, environmental ventures, associates, and O2 Netherlands, to capture the opinions of stakeholders which was sold in June 2003, for the communications employees also have explicit corporate and ethical criteria in product development; who have an interest in or affect the responsibility objectives to meet. focusing our measurement and reporting year ended 31 March 2004. The report - Distraction driving performance of our business. We have has been independently verified by our on diversity within our business; enhancing chosen the Five-Part Materiality Test Test 4: Stakeholder The practical definition of - Ethical sourcing of Coltan How we are seen and judged our ethical supply chain work; improved external assurance providers, Ernst & How we are judged is very important developed by AccountAbility to help us Young (see page 36). behaviour and concerns relevance to stakeholders in for the handsets we sell reporting on waste; expansion of our determine the issues that are material to terms of reasonable evidence to us. We welcome the fact that we certified environmental management and - Siting of communication continue to be rated highly by investors. our business and should be disclosed in In choosing how best to present our of likely impact on their health and safety systems. Our actions future reports. This year the exercise was activities we have followed two sets of decisions and behaviour. masts and antennae We are represented in some of the main responding to these are described in exploratory and carried out as a desk widely accepted guidelines. We use the greater detail in this report. - Research into potential sustainability indices and funds. For a review. Going forward the intention is Business in the Community (BITC) Reporting health effects of mobile second year running we were included Guidelines to highlight four main areas of Defining material issues for the mmO2 Corporate Responsibility communications in the Dow Jones Sustainability Indexes We strongly believe that non-financial Forum to examine the practical adoption activity – marketplace, environment and World – which ranks the top 10 per cent aspects of a business’s performance are of the Five-Part Materiality Test. sustainability, workplace and community. - Adult content and other of 2,500 companies around the world – increasingly regarded as material. We aim Once again we have added a section on inappropriate material on and became the leading company in the During the year the reporting process health because we know it is an area of mobile phones and to address matters that people care about has involved detailed reports about our wireless communication sector. We are also and that affect our business through this concern to some of our stakeholders. contacts made via mobile included in the Dow Jones Indexes Stoxx, engagement with employees to our phones report. In line with the AA1000 Assurance Executive Committee. A future target is In addition we report against the Global the FTSE4Good listing of the top 100 UK Standard’s materiality principle this report companies, the FTSE4Good Global Index to systematically capture other stakeholder Reporting Initiative (GRI). We have included Test 5: Societal norms Regulatory and - Adult content and other includes information about our corporate engagement and when appropriate include signposts in each of the sections of this non-regulatory inappropriate material on and are also members of the Brussels-based responsibility performance. Ethibel investment and sustainability registers. this information in our regular corporate report to make it easier for readers to mobile phones and We identified issues relevant to our business responsibility reports to the Board. The cross-refer our performance to the GRI. contacts made via mobile by following research activities that focused disclosure of relevant corporate responsibility A full reference to our compliance phones on corporate responsibility matters: objectives and targets covering material issues against GRI is available on our website at www.mmO2.com/cr/report2004. - Personal safety issues to our business has been subject to approval relating to mobile phones

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Association of British Insurers (ABI) Business Principles Disclosure guidelines on social responsibility [GRI Reference: this section covers 1.1, 3.7, 3.14, 3.16, 3.19, HR3, HR6, HR7, HR10, [GRI Reference: this section covers 2.20, 3.3, 3.4, 3.8] SO2, SO3, SO5, SO7]

Disclosure requirement mmO2 plc

The Board takes regular account of the significance of social, During the year, the Board of mmO2 plc was briefed on eight environmental and ethical matters to the business and the occasions on a range of social, environmental and ethical issues Company. facing the Company. The topics covered included community investment, health and safety, industrial relations, adult content and child protection, as well as environmental protection. A specific report on business ethics was presented to the Audit Committee. The Board has identified and assessed the significant risks to Social, environmental and ethical issues are integral to all aspects the Company’s short- and long-term value arising from social, of the business and are included in our risk-management environmental and ethical matters, as well as the opportunities procedures. We aim to include any social, environmental or ethical to enhance value that may arise from an appropriate response. risks in our risk registers to ensure they are fully integrated in our day-to-day operations. The Board has received adequate information to make this All new appointees to the Board receive training on a wide range assessment and account is taken of social, environmental and of issues including elements of corporate responsibility. Existing

ethical matters in the training of Directors. Directors can receive training on request. In addition, the Directors Everyone who works for O2 is expected We have also modernised our training Our own systems to monitor compliance attend a two-day off-site conference covering – among other things to act ethically at all times in their dealings procedures to ensure our Business with the Business Principles continue to be – specific social and ethical matters. The Board is briefed at least with each other, with suppliers, with Principles are understood and adhered developed and we intend to use online twice a year on corporate responsibility matters. customers and with the wider public. to across the business. Our online tools more effectively to support this training modules have been updated and process, including a governance certificate The Board has ensured that the Company has in place effective Our risk-management procedures are guided by the Combined Our statement of Business Principles – redesigned and cover a wide range of submission tool for managers and a revised systems for managing significant risks which, where relevant, Code developed by the Turnbull Committee. In common with other a copy of which is made available to all key policy areas, for instance, compliance booklet of ‘10 top tips’ to promote our incorporate performance management systems and appropriate risks, we manage social, environmental and ethical risks by assessing employees through leaflets and internal training on competition law, marketing, training courses and alert employees to remuneration incentives. their potential impact on the Company, measuring our appetite to and external websites – makes it clear to health, safety and the environment. manage them and by developing strategies to mitigate them. the confidential help facility. everyone that no job is more important We aim to make these courses available than protecting and enhancing the A number of Directors of Group companies and other employees to all employees during 2004/05. Approaches to corporate governance Company’s reputation. have explicit corporate responsibility objectives to meet. All those are changing rapidly and we track these A network of compliance officers now works charged with managing risks are remunerated on the basis of changes carefully. One of our main aims for As well as encouraging all employees to across the business to track compliance with their success in meeting clearly defined targets. This has been an 2004/05 is to make sure that compliance abide by the Business Principles, we also the Business Principles and helps managers important step in encouraging good ethical conduct in all our with our regulatory requirements and our aim to persuade suppliers to embrace them to ensure that all employees complete their dealings and in providing a framework for managing, measuring commitments to Turnbull, Sarbanes-Oxley by referring to them in our UK supplier training requirements. and accounting for the impact of our business. During 2004/05 and our Business Principles are brought contracts. together under an overarching Internal we aim to align the management of corporate responsibility to the Our statement of Business Principles is Company’s performance management process. Our Business Principles cover the ethical Control framework comprising risk supported by a confidential helpline and management, certification and internal- behaviour we expect of everyone on issues e-mail facility that enables people with A description of social, environmental and ethical related risks and Two particularly significant corporate responsibility risks confront audit procedures. such as competing fairly; accepting gifts concerns about the way we are operating opportunities that may significantly affect the Company’s short- mobile communications companies: public concerns about the and hospitality; delivering good value; to come forward in confidence. This is a and long-term value, and how they may impact on the business. safety of handsets and other portable equipment and worries about health and safety; and fair and equal UK regulatory requirement of the revised the siting of communication masts. A detailed review of these and employment. They make it clear that we Combined Code C.3.4/Smith Guidance other risks are included in this report. will not tolerate harassment in the 4.8 introduced in July 2003. The US do not make donations to A description of the Company’s policies and procedures for Our risk-management policy describes in detail our procedures for workplace, Sarbanes-Oxley Act 2002 specifically political parties and aim to protect the managing risks to short- and long-term value arising from social, managing risks. All social, environmental and ethical risks are requires SEC- registered companies to confidentiality of employees and customers. environmental and ethical matters. covered by this policy. keep a register of complaints made by We measure the appropriateness of our so-called ‘whistle-blowers’ and actions A description of the extent to which the Company has complied Controls for risk-management are constantly scrutinised through Business Principles by benchmarking taken to investigate complaints. with its policies and procedures for managing risks arising from internal audits. The Audit Committee is regularly updated about our ourselves against leading UK and US social, environmental and ethical matters. risk registers and the progress of mitigating risks. companies. Our membership of both A description of the procedures for verifying social, environmental Corporate responsibility matters are included in our internal audit the Institute of Business Ethics and the and ethical disclosures. reviews, where appropriate, and reported to the Audit Committee. General Counsel Round Table have given The content of this corporate responsibility report has been us invaluable insight into how well we externally verified by our assurance providers, Ernst & Young (see are doing compared to others. page 36). In addition, our environmental and health and safety risks are subject to third-party audits through operational risk reviews, which form part of our insurance programme. Our compliance with the industry-agreed Ten Commitments on responsible mast siting in the UK is subject to third-party review.

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Strategic objectives [GRI Reference: this section covers 1.1, 3.16] We set stretch targets – and measure our progress [GRI Reference: this section covers 3.19]

We measure our performance against guidelines drawn up by Business in the Community and the Global Reporting Initiative. We concentrate on five key areas:

Strategic objectives We aim to: To achieve these overriding objectives One of our most important achievements we will focus our efforts on proactive Marketplace How we operate in relation to customers in ensuring that corporate responsibility Make all our employees proud to be working engagement with stakeholders across society, is rooted at all levels of O2 is the creation for O2 and encourage them to demonstrate the including our peers within our sector and and wider society. of explicit strategic objectives for our highest levels of integrity, while advocating and our suppliers. Through this engagement corporate responsibility activity. This was pursuing responsible business management. we want to promote responsible business endorsed by the Executive Committee behaviour and advocate universal labour in May 2004. standards, human rights and environmental protection in our operations and our supply Health How we take action to ensure our products Our strategic objectives on corporate chain. Further, we want to enhance our responsibility sit alongside the operational Achieve continuous improvement in our operations in all areas that affect our customers, stakeholder engagement through increased and services operate safely. strategy for the business and will be the physical environment and society as a whole communications and interaction with similarly measured by key performance through measurement, monitoring and review local communities to enhance trust and indicators to ensure that we set ourselves of our performance and by committing ourselves to excellence. acceptance. We will continue our campaigns stretch targets and successfully meet them to promote personal safety and pursue within established timeframes. Key active self-regulation in emerging subject Environment and sustainability How we pursue performance indicators for our corporate areas to ensure a positive experience for responsibility activity for each of our all stakeholders. policies that protect the environment in a sustainable way. businesses will be established during Be proactive in developing exciting mobile services 2004/05. The table on pages 34-35 sets that enable people to have great experiences Through these newly adopted corporate out the specific corporate responsibility and that contribute to innovation, satisfaction, responsibility objectives each of our main targets that we are currently working well-being and safety in the community. operating businesses are committing to: towards. We have highlighted those that – Integrating the management of Workplace How we create a fair and equal workplace have been modified or are new. corporate responsibility within their Our strategic objectives on corporate own organisations. that our employees are proud to be a part of. responsibility are to guide our operations so that social, environmental and ethical – Continuously improving the considerations are embedded into our performance in social and business. environmental areas and enable external review of all related activities. Community How we can make a real difference – Establishing a field of corporate responsibility excellence in each to society using our technology, skills and the active of our main markets. involvement of our employees.

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Marketplace [GRI Reference: this section covers 2.22, 3.15, 3.16, 3.19, EC4, HR1, HR2, HR3, HR6, HR7, SO6, SO7, PR3, PA1, PA2, PA3, PA4, PA5, PA7, PA10, PA11, TA1, TA2, TA4]

External view: “Business in the Community Ireland is delighted to have

O2 Ireland as one of our founder members. The company is active in our Strategic Corporate Community Involvement service and our Schools’ Business Partnership

and Danuta Gray, CEO, O2 Ireland, sits on our Board. External view: “We have had a very good Response from O2: For two years O2 has been experience working together over the last two supporting Demos in looking at the future of In June 2004, O2 Ireland launched, in association with the Irish Cellular Industry mobile technology and what it might mean years. O2 is one of the most proactive of the Association and other operators, the first ever Irish Code of Practice for the Response from O2: Together with mobile companies, indeed one of the most for broader social change. We sponsored the Ireland’s two other mobile operators responsible and secure use of mobile services. We commend O Ireland for this proactive of all companies, in thought leadership Demos pamphlet ‘Mobilisation’ by James Harkin 2 O2 Ireland has agreed to conduct an and in stimulating public debate. It’s not just a which achieved wide coverage in the media. initiative. It is a unique example of best practice and engagement with customers industry mobile content filtering trial. case of sponsoring research and sitting back. More recently we have staged a series of and competitors to raise standards and quality of service.” This trial will test content filtering 20.7m O2 is really engaged in the process.” seminars with Demos on child protection, software on a mobile network for customers privacy and health. James Wilsdon, Head of Strategy at Demos Tina Roche, chief executive, Business in the Community Ireland the first time.

The mobile phone industry in the UK HomeZone service combines advanced competition. The new EU regulatory Protecting the vulnerable services and devices as well as tools so they used in socially useful ways from car-fleet has grown, in just 20 years, from nothing technology with reduced tariffs in defined framework requires national regulators to People want to be assured that we can control the internet content their services to doctors’ appointment alerts. We to an industry employing nearly 200,000 areas. In the UK we introduced new Pay & remove regulation from markets that are safeguard children and young people from children access. are stimulating debate about the potential

people and combined revenues in excess Go packages, such as O2 Home for low-cost competitive, and in the UK Ofcom has accessing inappropriate material or contacts future benefits of digital technologies of £20 billion. According to research by home-based mobile calls. already reduced mobile regulation to reflect via their mobiles. As mobile technology It also provides for the appointment of an through our opinion-leader seminars. This the Centre for Economic and Business intense competition. advances, it is expected to become a independent body to define the types of year we arranged a series of seminars on The improved performance of our UK content to be classified as 18. Operators Research in the UK, commissioned by O2, channel for a wide range of services subjects such as privacy, child protection the whole mobile sector contributed network was recognised during the year We would never knowingly break planning including pornography, gambling, financial will require users to prove they are old and health. £22 billion to UK GDP in 2003, 2.2 per when we were named Best Network or advertising rules, hence this area of services and direct marketing. We respect enough before they access such content. cent of total GDP. Operator by the regulator, Oftel, now called compliance is closely monitored by our our customers’ rights to make choices Privacy and security the Office of Communications (Ofcom). compliance officers. During 2003/04 we In Ireland we are launching parental Customer privacy is an increasingly sensitive about the legal material they access authorisation to our services which will The average employee in the mobile sector received a notice from the local planning through our network, but equally our issue and we believe that the introduction generated £120,000 in revenue. This is Pricing and regulation authority with regards to three temporary allow parents and carers to monitor their of location-based services – which will The price of mobile phone services and the customers want to be sure that we protect child’s account and the services they access. three times the national average. The road advertisements that we had placed the vulnerable, particularly children. identify a mobile phone user’s position – analysis also reveals that the mobile industry complexity of tariffs continue to be a along the M25 motorway in the UK, the We do not offer adult content, text or chat could infringe a person’s right to privacy. contributes £15 billion a year to government concern in many places. In Germany there is signs were removed once we had been During 2003/04 we published a series of services in Ireland and are testing technology We are working on a code of practice with finances, the equivalent to an additional growing concern that young people are informed about the incident. In 2003/04 child-protection leaflets providing practical to filter or block unsuitable imagery. other operators in the UK. 3 pence on the basic rate of income tax. spending too much on mobile phones, we had no complaints about breaches of advice on such issues as handset theft, the especially on new data-rich services and Operators have agreed to help the police We are committed to respecting customer advertising rules. safe use of camera phones and grooming tackle illegal activity and to combat bulk Mobile technology has reached the mass camera phones. In Ireland, the regulator by paedophiles using chatrooms. The series confidentiality, but we are obliged by law to market and become a major contributor ComReg has called for greater price Our products and services and nuisance communications. All our make customer records available to police is now available in O2 stores in the UK and chatroom services are now moderated, to the economy in the UK and in our transparency in the industry, and the Mobile communication has evolved from Ireland and on our website. We do not on production of a court order. Heightened other markets. European Commission is continuing to voice telephony to sophisticated data to try to identify and stop inappropriate security fears have increased the pressure market to children, in line with industry exchanges. This is supported by the investigate mobile operators’ international services that constitute some £1 billion of best practice. We address our child- on us in this area and, under UK law, other Our customers roaming charges. our revenues. We aim to be a leader in Nuisance Call Bureau run by O2 UK, which emergency services can demand access to We are concentrating on improving the protection material to adults and children’s is equipped to advise customers on the this market. organisations. Our leaflets aim to raise records. We try to balance individual rights customer experience by creating a culture We co-operate with regulators openly to deal appropriate use of mobile phones. and the wider national security carefully. In of ‘customer-centricity’ that is supported by with such issues and take action. This year, for During the year our general packet radio awareness about personal safety amongst young people and children. As new web-enabled services become more 2003 we set up a new Fraud and Security a Group-wide programme. We have made example, we introduced a flat-rate charge for (GPRS), or 2.5G service, became a mass- Helpdesk in the UK, including a 365 day, some good progress here. Our customer all our roaming services in Europe. We offer market product and take-up of internet- widely available, we know that the problem In January 2004, we helped publish a UK of virus contamination, junk marketing and 24-hour customer contact number to base grew in every region last year and now pre-pay packages in all our markets so users driven services like e-commerce, banking, mobile operators’ joint UK Code of Practice respond to queries more effectively. amounts to 20.7 million. can control their mobile phone costs. Our online billing, and music grew rapidly. We hacking may become more serious. We are for the self-regulation of new forms of working to find solutions, and through the mobile phone tariffs are freely available both will increasingly offer more capable third- content on mobile phones such as visual The O2 Airwave network is more than In Ireland we introduced the All Ireland online and through our shops, which enables generation (3G) services in the UK, implementation of the code we will also look two thirds through its roll-out to police tariff, which eliminates roaming charges content, online gambling, mobile games, into tackling unsolicited communications, consumers to compare prices with other Germany and Ireland. chatrooms and internet access. A forces in mainland Britain. If adopted by between the Republic of Ireland and operators. Simpler pricing and clear roaming also called spam. fire and ambulance services it will provide Northern Ireland. We introduced a new Our Xda II hand-held combined computer comparable initiative is under way in tariffs across Europe are also the aims of those Ireland with an industry code published Informing the debate interoperability between the emergency international calling tariff for post-pay operators who have joined us in the Starmap and phone and the Blackberry™ mobile services, which is currently not possible. customers calling African, Asian and e-mail device have been taken up widely. in June 2004, and we are advocating a We are demonstrating how mobile phones Alliance of European operators. similar approach in Germany. The UK Code play a positive role in public life and this O2 Airwave’s campaign to support road European destinations, enabling foreign We have also launched a new O2 Digital commits us to providing information to year published a book, ‘Options – mobile safety for children is designed to underline nationals in Ireland to call home at Regulation is starting to reflect the fact that Music Player to complement O2 Music, its wider role in making Britain safer. competitive rates. In Germany, the Genion our industry is mature and subject to tough Europe’s first mobile music download service. parents and carers about new mobile technology in public service’, describing 100 different areas where mobiles are being

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Marketplace (cont) Health [GRI Reference: this section covers 2.22, 3.13, 3.15, 3.19, HR1, SO1, PR1, PR2, IO3, IO4, IO5, IO6, PA8, PA9]

External view: “In general, for the past year the number of

complaints against mmO2 fell in relation to previous years.

External view: “We recognise O2’s commitment to address social We find that the problems arise when the stakeholders for and environmental issues in its supply chain and to foster the consultation are not properly identified and this needs to be clarified. development of industry standards through its contribution to We would also take issue with their interpretation of community initiatives such as GeSI. In our view, companies that systematically consultation from Commitment 1. We find that in certain cases integrate these issues into procurement demonstrate a consultation frequently disintegrates into dictation by the operator, comprehensive approach to risk management. As such, O2 would Response from O2: We are currently driven by economic rather than community need. Response from O2: In response to the findings further benefit from advancing the training and incentivisation assessing detailed feedback from ISIS Asset of the external review of the implementation of its procurement staff. Clear policies on end-of-life management Management and some of our major suppliers Correctly trained and fully accountable site acquisition agents would of the Ten Commitments in 2003, we have would also enhance the company’s responsible approach to its on how we can implement our ethical and improved our procedures and controls over business operations.” environmental procurement policies. Our help to solve many of the problems encountered.” the level of local consultation required. We are conclusions will depict which activities we committed to fund another external review Claudia Kruse, Senior Analyst, ISIS Asset Management will pursue going forward. Julie Matthew and Christine Mangat, Mast Action UK of our performance in this field in 2004.

Supply chain Digital divide meet their needs and for whom mobile The health and safety of our employees, The safety limit for mobile phones is called ensure that research addresses appropriate We work with our suppliers to raise The majority of the West European services could make daily life easier. There customers and the public is very the Specific Absorption Rate (SAR), which public health concerns. awareness about ethical sourcing. Our population, of all income and age groups, is room for much greater development important to us and is included as one measures the amount of radio frequency Ethical Procurement Policy, based on the subscribe to a mobile service. But access is not of services for people with disabilities. of our main risks in our consolidated energy absorbed by the body during mobile The Mobile Telecommunications and Health Research (MTHR) programme, jointly funded Ethical Trading Initiative base code, outlines always equal because of cost or geography. Although we have made special provisions risk register for the mmO2 Group. Our phone use. All handsets sold by O2 conform what we expect of our suppliers on key – like invoicing in Braille, large text size approach is to adhere to best-practice to relevant SAR safety limits. Details of SAR by the UK Government and the industry and issues such as employment standards and We try to narrow this digital divide. The and audio options for people with visual guidelines on mast-siting wherever we levels for specific models of mobile phones set up in direct response to the Stewart Report, health and safety. We have surveyed a Group’s Chief Technology Officer, Dave impairment and enabling special text operate and to consult communities are available from the Mobile Manufacturer’s is the main focus for our support in the UK. number of our major suppliers with a self- Williams, has joined the UK Government’s services for the deaf – we recognise there openly where it is appropriate and Forum’s website on www.mmfai.org, We are contributing to the overall research assessment questionnaire and will be Digital Inclusion Panel to support this effort. is more we could do. We aim to be fully provide clear information about how as well as on the German websites budget which exceeds £7 million over a widening the scope to cover more suppliers In all our markets we offer our adult compliant with General Code 15 and the our technology works. www.izmf.de, www.o2online.de and six-year period. The MTHR programme in 2004/05. customers pre-pay packages regardless Code of Practice for Service Delivery for www.de.o2.com. currently covers 23 studies, including exposure, of background or credit history, allowing Disabled and Elderly Customers in the UK We take care to ensure that the equipment dosimetry, epidemiology, and the psychological We belong to the Global e-Sustainability everyone to benefit from mobile before March 2005. Outstanding measures we use and supply never exceeds international Measurements by the UK’s NRPB and and social effects of mobile telephony. Initiative (GeSI) and are part of its supply- communications. Pre-pay mobile phone are: free directory and relay service for safety limits. Several independent international Ofcom (formerly Radiocommunications chain working group which aims to develop services enable the users to control the agencies have developed safety guidelines Agency) and Germany’s Regulation Office Separately, the MTHR management visually impaired customers; lack of committee manages additional programmes, common best-practice principles and tools for associated costs of using a mobile. literature on appropriate devices; and the within which we operate. These include the for Telecommunications and Post have use in the information and communications UK’s National Radiological Protection Board confirmed that exposure levels from our including the £10 million Home Office study Our telecommunications networks cover O2 internet portal. We work with leading on Terrestrial Trunked Radio (TETRA) – the technology (ICT) sector. We will use this to organisations in this field and belong to the (NRPB), Germany’s Strahlenschutzkommission base stations are always below safety limits, benchmark our activities and set targets. substantially all of the population of the (SSK), the International Commission on in most cases by many hundreds or even technology provided by O2 Airwave, our UK, Ireland, the Isle of Man and Germany Employer’s Disability Forum to understand secure network for emergency services. In October 2003 we helped arrange an how to respond. Non-Ionising Radiation Protection (ICNIRP) hundreds of thousands of times. Our masts event in Geneva, Switzerland about ethical (in conjunction with our network sharing and the European Commission. are carefully cordoned off and clear safety Under the MTHR programme an assessment sourcing. In 2003/04 we were involved in agreement with T-Mobile). In Ireland we In Ireland we have launched a new handset signs are posted to warn members of the of Specific Absorption Rates (SAR) to the four important supply chain studies by are the only mobile operator to gain in association with the National Council The scientific consensus is that mobile public not to get close to antennae. When head from TETRA handsets has already independent organisations, including government funding to install wireless for the Blind of Ireland (NCBI). The device communication masts and mobile phones maintenance work is carried out at any of been published. ‘Clean up your Computer’ led by the broadband (WLAN) hot spots to selected has specially tailored ‘Talk’ software that do not pose a threat to human health. But our sites strict safety procedures should locations and recently installed one in the studies, such as the Stewart Report, often O2 Germany supports Deutsches Mobilfunk Catholic campaigning organisation CAFOD, converts text messages to voice and tells be followed in line with local regulation. Forschungsprogramm, a €17 million two studies by Insight Investment and one civic offices in Westport, County Mayo as users what the phone is doing as they use call for further independent research into part of this initiative. We are also part of areas of uncertainty and we are committed Research commitment project, which is also jointly funded by the for FTSE4Good on responsible supply chains. it. We have redesigned our British and German Government and the industry. an industry initiative to fund the roll-out Irish website to improve accessibility and to help fund and support it. The industry We do not carry out any research ourselves O2 will eventually contribute 11 per cent The payment terms for major contracts are of broadband to all 4,100 primary and navigation for visually impaired users. has adopted a precautionary approach to but continually monitor international studies agreed at the same time as other terms are secondary schools in the country. In the the alleged health concerns of mobile and are co-operating with and helping to of the total cost of the four-year research negotiated with individual suppliers. The Isle of Man we have rolled out fixed-line During the year we supported DisabledGo, communications. fund a number of initiatives. We only support programme of 18 studies – including Group’s policy is to pay for other purchases broadband internet access to 98 per cent a UK-based not-for-profit, social enterprise studies that meet clear criteria: research must biology, dosimetry and risk communication. within 30 working days of the invoice date, of all households and businesses at funded by business. DisabledGo operates a Safety levels be subject to peer review, of good quality, Our communication masts and handsets During 2003/04 we also helped to fund provided the invoice is presented in a timely discounted rates agreed under a new website for disabled people and their carers, expertly conducted, published in reputable new and continuous research in this subject. fashion and is complete. We aim to pay our licence from the Manx Government. giving detailed information on access to operate within safety guidelines specified journals and be independent of industry. creditors promptly within 30 days of a valid services like hotels, cinemas, restaurants, by ICNIRP. Mobile phone networks are We consult with the Department of Health Working with other operators invoice being presented. The Group had 34 Services for customers with special needs solicitors’ offices, pubs and train stations. designed so that the phone is, in most cases, and the Department of Trade and Industry We participate in and fund a number of (2003: 32 days) days’ purchases outstanding We want to examine ways to make our We are testing whether we can offer the operating at less than its maximum power. in the UK, a range of world trade bodies, industry groups, including the Mobile at 31 March 2004 based on the average daily services more inclusive, particularly for service through mobile phones. The closer a caller is to a base station, the governments and health organisations to Operators Association (MOA) in the UK, the amount invoiced by suppliers during the year. people who require special assistance to lower the power levels in the phone. Informationszentrum Mobilfunk e.V. (IZMF)

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Health (cont) Environment and sustainability [GRI Reference: this section covers 2.22, 3.15, 3.16, 3.19, 3.20, EN1, EN2, EN3, EN4, EN10,

EN17, EN7, EN25, EN8, EN5, EN9, EN11, EN13, EN33, EN14, EN15, EN16, HR3, HR9, PA11] Chart 1: O2 UK queries on the siting of Chart 2: O2 base stations in service communication masts 2003/04 (estimate) Table 1

CO2 emissions from energy Total MWh CO2 kg CO2 Tonnes

consumption conversion CO2 factor Buildings (Group-wide offices and UK retail premises) Electricity Kwh 55,927,506 55,928 0.43 24,048,828 24,049

Natural gas Kwh 32,310,347 32,310 0.19 6,138,966 6,139 Network (switching and cell sites)

Electricity (excludes O2 Airwave) Kwh 213,090,130 213,090 0.43 91,628,756 91,629 Natural gas Kwh 5,364,905 5,365 0.19 1,019,332 1,019 Total 122,835,881 122,836 Water consumption Site objection (pre-build) 261 38% UK 8,729 Buildings (offices) Total Water (excludes O2 Ireland, Manx Telecom Land offer197 29% Germany 9,213 3 and O2 Airwave) m 3,184,252 Query (non complaint) 90 13% Ireland 1,600 Waste & recycling

Query (planning) 65 10% Isle of Man 39 Total Tonnes General waste generation (excludes O Airwave) kg 2,707,065 2,707 Site objection (post-build) 65 10% Total 19,581 2 Goods recycled (excludes O2 Airwave and O2 Germany) kg 388,490 389

in Germany and GSM Europe. The review was followed by a series of five half- helpline for these issues. Our leaflets were At O2 we want to manage our business We continue to make progress in Coltan, a mineral used in the circuit boards MOA champions the UK industry’s Ten day industry seminars with almost 600 reviewed during the year and we have in a sustainable way, providing exciting most areas where we have set specific of mobile phones, has been subject to wide- Commitments on the siting of mobile agents, planning consultants and operators recently published two new ones outlining and profitable mobile services without improvement targets. We have surpassed, spread concerns due to its illegal mining in communication masts, which can be to ensure they follow site selection, planning the health issues of mobile networks and compromising the environment. We aim for example, our target to recover mobile the Democratic Republic of Congo. This viewed on our website at models and record keeping procedures our research policies. The IZMF co-operated to minimise any negative impact we phones for re-use and recycling by over mining activity has allegedly fuelled ongoing www.mmO2.com/cr/report2004. properly. UK operators have agreed to fund with partners and published leaflets for have through efficient environmental 71,000 phones. civil unrest in the country and at the same another external review in 2004. doctors, parents and teachers. We have management and by promoting time threatened the habitats of highland A greener supply chain They address community concerns about also issued a new video, that explains the sustainable development. gorillas. We have engaged with our In 2003/04 we launched our Group- mast development by ensuring transparency We have a formal agreement to share 3G health and safety issues around O suppliers of mobile phones and required 2 Within each of our operating businesses wide Environmental Procurement policy in building mobile phone networks, networks with T-Mobile in Germany and a Airwave’s TETRA technology. them to investigate and inform us about providing more information to the public general policy to share masts with all other a senior manager champions our Group to help us source products in the most their sourcing of Coltan. Our Chairman environmental strategy and reports to the environmentally responsible way and and local planners and boosting the operators and use existing infrastructure O2 often takes a lead in producing industry- David Varney raised further awareness about community’s role in the siting of wherever feasible. wide information material. For example, our environmental forum, chaired by our spread best practice in our supply chain. this topic in his speech to the Institute of communication masts. We are committed technology department was responsible for Environment Champion, David McGlade, Directors in April 2003. Supporting informed debate O2’s local and international suppliers provide to complying with the Ten Commitments drafting advice for the MOA on Repetitive Chief Executive Officer of O2 UK. The goods and services that include network for our operations in the UK while our The dissemination of clear and accurate Strain Injury, an important issue in light of forum meets twice a year to set targets Energy consumption infrastructure, mobile devices, distribution other operating businesses have committed information is an important part of the the huge growth in text messaging and and reports regularly to the Executive We seek to reduce our overall energy transport, IT hardware and software and to similar recommendations developed by industry’s work and we try to influence it games played on mobile phones. Committee and the Board. use, while buying more electricity from branded clothing and merchandise. We the industry association GSM Europe. at several levels. renewable sources. As a growing business Technology Our strengths in managing environmental will work closely with them to help them We work through consultation and dialogue. with an expanding network, we try to Voluntary self-regulation helps us to be With the arrival of third generation or risks were recognised publicly during the minimise any shortfall in their operations. balance our business aspirations with a transparent in our dealings with local O2 chairs the GSM Europe working group on 3G services, we will work to reassure the year when we were again included in Our target last year was to engage with policy of due care for the environment. communities and to generate trust among environment and health issues and regularly public that more sophisticated services the Dow Jones Sustainability Indexes. In key suppliers to satisfy ourselves of their residents affected by our operations. In engages with public health agencies. We have will not mean more health risks. We response to the Index assessment, we are environmental performance. To raise each of our markets we employ community recently called for improved information on believe that the perceived risk from these improving our monitoring systems and are awareness about ethical sourcing, we relations managers to consult the public health and mobile telecommunications from multimedia technologies will, if anything, refining our environmental data. We are distributed a self-assessment questionnaire and local agencies to explain our mast the European Commission. During the year, be reduced because devices tend to be working with some of our main contractors to our main suppliers. During 2004/05 development strategy. we took an active part in both planning and used away from the head. Importantly, to capture some of their environmental we will continue to work closely with them participating in a health conference jointly TETRA and 3G base stations will not overall impacts in our figures for the coming year. to help us implement our environmental Last year the industry commissioned an organised by GSM Europe, the Mobile require higher levels of power than existing procurement policy. This will include supply external review of UK operators’ compliance Manufacturers Forum and the European GSM base stations. with the Ten Commitments. The review Commission to share evidence and opinion chains that have been identified as having concluded that operators had made progress on the contribution of mobile communications Distraction driving greatest potential risk. Details of how our in implementing them, but also identified to safety, the environment and European society. Last year we reported on distraction ethical procurement policy deals with areas for improvement. One recommendation Around 200 government representatives driving and how we had been involved in human rights and working conditions suggested that we improve record keeping and stakeholders attended and a second consulting the UK Government on the are on page 20 of this report. because the information kept by acquisition conference is planned for September 2004. proposed legislation to ban the use of agents did not adequately prove that hand-held mobile devices whilst driving. operators were conforming to best practice. We talk to local communities, advertise our This legislation has been introduced in all In response to the review’s findings we have activities and employ customer service staff of our markets and we continue to make improved our procedures and controls over trained in responding to health and mast available information leaflets on this topic the level of local consultation required. The siting complaints to run our dedicated for our customers as well as our employees.

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Environment and sustainability

Chart 1: Recovered materials from Chart 2: Electricity from mobile handset recycling (kg) renewable sources (per cent)

1,020 30

200 25

150 20

15 100

50 5

0 0 use of % Aluminium 171.03kg Palladium 0.39kg 2002/03 2003/04

20% Cobalt 80.09kg Platinum 0.0004kg O2 UK 520 8 improvement – electricity from renewable Copper 1020.06kg Silver 0.20kg O2 Germany 711 decreased energy Lithium 3.27kg Zinc 20.70kg O2 Ireland 23 32 sources in the UK consumption1 Stainless Steel 22.92kg Manganese 20.70kg Manx Telecom 0 0 Gold 0.70kg Cadmium 11.33kg

For the purpose of this report we will cover Our operations in the UK have achieved 20 well as materials recovered from network In the first year of Fonebak we recovered A proportion of the revenue from the sale Producer responsibility is an increasingly the energy and water consumption as well per cent use of electricity from renewable sites. We recognise that we need to establish 20,000 handsets and set a target to double of refurbished phones is donated to chosen important issue within the European Union as waste generation by our offices and sources (excludes the O2 Airwave network). better systems to audit and manage our this in 2003/04. We actually recovered charities, which also acts as an incentive and we are affected by two directives. The networks. These figures do not cover our In Ireland the figure is 32 per cent and in waste systems and to track our recycling 111,262 phones and these have been for customers to hand in their redundant first obliges us to gather accurate data on transport data or our retail operations Germany 12 per cent. We are currently performance. This is one of our planned refurbished for re-use or recycled, leaving phones. To build on our previous experience the packaging we use and evidence that outside the UK, as energy consumption is renewing our energy supply contract in activities for 2004/05. only a small amount of inert plastics from of tree planting projects with Future Forest our recovery and recycling targets have relatively small by comparison and accurate Ireland, which should significantly raise the the batteries being sent for controlled we decided through Fonebak to support been met. This is carried out on our behalf Recycling and re-use of mobile handsets data is difficult to get. We do not currently proportion of renewable energy we use. landfill. Shields Environmental have set up Rainforest Concern, an international charity by the Valpak Compliance Scheme. The and equipment measure materials or waste used, or a recycling facility in Romania to ensure working to combat global warming by second – the European Commission We aim to improve our data for water Fonebak, the fully managed recycling discharges to water. The figures also the responsible disposal of mobiles where conserving forests and their biodiversity. Directive on Waste Electrical and Electronic consumption, so that we can express it solution for mobile handsets and accessories, omit emission conversions to NOx and these are sold for re-use. Details about the In Ireland we have also partnered with The Equipment (WEEE) – obliges operators and as a total and per employee, incorporating operated across O – with the exception of SOx, emissions from the operations of 2 material recovered through recycling are National Tree Council of Ireland to support retailers to provide ways to recover and figures from key contractors. Germany – by Shields Environmental, has subcontractors who maintain our networks included in chart 1 on page 24. a tree-planting initiative of 15,000 trees. recycle electrical and electronic equipment. exceeded our expectations. We encourage and distribute our products. In future we Waste management and recycling By participating in a takeback scheme we customers and employees to hand in In Germany we have recently launched In accordance with our commitment to aim to capture and report on these too. We have established schemes at all of our should meet our collection obligations phones for re-use or recycling, either by a similar initiative with Greener Solution, reduce the environmental impact of our major sites to separately collect and recycle under the current draft regulations. Our network accounts for more than 70 per depositing them in boxes in our shops and which has included an internal campaign supply chain we have extended Fonebak paper, cans and plastic cups. Our target is cent of our reported energy consumption, offices or by freepost. to raise awareness about mobile recycling to corporate customers, among them the Greenhouse gases and pollution to increase the proportion of office waste with the rest associated with offices and among employees. Co-op Group and AT&T. We aim to reduce emissions of the recycled by 10 per cent by March 2005. call centres. For the Group overall we set greenhouse gases associated with our Base station equipment throughout our a target of achieving a 10 per cent use of Besides the office waste referred to above, consumption of energy, in line with UK networks is upgradeable. In March 2004 electricity from renewable sources by 2008, we have identified a number of other waste Government commitments on global we signed a contract with one of our this target will be reviewed during 2004/05. streams which are capable of being recycled warming. We will also reduce our use of suppliers to ensure our third generation We have made progress on this target in – overall we believe that we currently achieve other materials such as refrigerant gases, (3G) mobile systems will be processed all countries where we operate except the a recycling rate of wastes of around 10 per which may further contribute to global for re-use or recycling. Isle of Man. cent in the UK. In 2003/04 we recycled 389 warming and also to ozone depletion. tons of waste Group-wide, which includes We are currently rolling out our new handset and battery component recycling as Airwave network and are not expecting to refurbish or recycle any of the network materials within the next few years. The Airwave handsets have a five-year manufacturer’s guarantee. We will address the responsible recovery of the handsets once the guarantee period has run out, starting from 2008.

1 This does not include transport related CO2 emissions

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Environment and sustainability (cont) Workplace [GRI Reference: this section covers 2.22, 3.18, 3.19, 3.20, LA1, LA2, LA3, LA4, LA5, LA6, LA7, LA8, LA14, LA15, LA9, LA16, LA17, LA10, LA11, HR1, HR4, HR5, HR10, IO3, PA7]

External view: “As one of the biggest corporate users of mobile phones we’re confident and happy with our

involvement in the Fonebak scheme with O2 and Shields

Environmental. It was exceptionally easy to set up. What External view: “mmO2 understands the importance of good appeals most is that it provides an audit trail so that we employee relations. The company and Connect have a strong record of working in partnership to manage the challenges Employee representative: “Any big change which involves can verify how we are dealing with our waste and track people losing their jobs is inevitably traumatic – and it wasn’t which arise in a fast changing industry. The benefits of this without pain. But by and large it was done as quickly as the money we are raising through it for our chosen charity, possible while ensuring fairness and objectivity. To my mind approach were demonstrated this year during the Project it was handled as well as it could be in the circumstances.” Stockholm reorganisation, where complex people issues were Water Aid.” Response from O2: We are encouraged to Julian Keeley, Head of Regulatory and Carrier Services and promote the Fonebak scheme to more customers handled in an open and professional way.” one of the employee representatives for middle and senior management of O UK. During the restructuring of our Becky Toal, Environmental Programme Manager, the by companies such as the Co-op Group. 2 Together with our customers we will have a Steve Donnelly, National Officer, Connect – the union for operations last year, he played an important part in ensuring that people affected by change were dealt with fairly Co-op Group greater impact on environmental protection. professionals in communications and objectively

We have a target to reduce refrigerants Consulting with communities we are now implementing car sharing We want O2 to be a business where Our culture As part of our drive to improve the Group’s and HCFC gases by 10 per cent per unit of The environmental impact of our network – for employees across our UK sites. This people are proud to work, motivated, We promote diversity and individual performance and to support our focus on total volume by March 2008. A programme visually and in terms of noise and supplements the online, inter-company knowledgeable, included and well fulfilment in work by offering competitive people development we are implementing to replace R22 coolants in air conditioning landscaping – continues to cause some car-share scheme run by Leeds County rewarded. Our success depends on the rewards, opportunities for personal a new online human resources system. with HFC R407c is under way in the UK. concerns, which we try to handle through Council, in which 134 of our employees skills and talents of our 12,905-strong development and a supportive, flexible The new system will provide real-time We are also considering the feasibility of early consultation with local authorities participate. During the year we also increased workforce, their well-being and job and modern working environment. We accurate data and automate many currently

replacing air conditioning altogether with and communities. Our dedicated O2 UK the frequency of company buses between satisfaction. also encourage employees to take a positive manual processes, such as recruitment forced air systems, as our long-term goal response team recorded 999 queries on our Slough buildings to cut the use of cars role in the communities they serve. and management reporting. It will enable is to significantly reduce the amount of new sites or site objections during the and taxis. The United Nations Universal Declaration managers to make fully informed commercial stored refrigerants relative to the number year, see chart 2 on page 22. of Human Rights and the International We have continued to assess employee decisions about their team and increase the of active cell sites. We are committed to using more audio, Labour Organisation’s principles underpin engagement and offer a channel for amount of time they can spend developing For more information about our strategy for video and web conferencing to reduce our practices. We always aim to treat feedback through Reflect O2. In October their people. Diesel tanks at our fixed installations store the siting of mobile communication masts, road mileage. Leading by example, our everyone fairly, impartially and without 2003 we saw our employee engagement large quantities of fuel and our goal is for please see pages 21-22 of this report. environmental forum to be held in September prejudice, regardless of race, colour, scores rise by 2.2 per cent to reach 72.7 Diversity and human rights 100 per cent to be secondary protected 2004 will be conducted entirely through nationality, ethnicity, religious affiliation, per cent across the Group. We believe that a company is most likely against spills and leakage by March 2005. An environmental checklist helps minimise video link. gender, sexual orientation, marital status, to serve its employees, customers and This has already been achieved throughout the impact of our mast siting and base age, disability or caring responsibilities. In August 2003, in response to Reflect stakeholders well if it reflects the diversity the Group, except on the Isle of Man where station building programme on local External certification and verification We exercise zero tolerance to all forms of O2 findings, we began to introduce extra of society at large. We want all our we aim to secure 12 installations before communities, for example where schools Our environmental management systems harassment, and take steps to prevent product training, better information for employees to benefit from equality of March 2005. or places of natural beauty are concerned. are reviewed internally and externally. The injury or ill health in the workplace. employees and opportunities for non-retail opportunity and reward. We work to find alternative sitings or to international environmental management employees to spend time in our shops. There were no significant spills of chemicals, mitigate the impacts when issues of standard ISO 14001:1996 is now being Our emphasis is on communicating with An audit by an external agency in 2003 oils or fuels in our operations during biodiversity or visual impact occur. integrated into most parts of our business. employees through regular business We are also taking steps to ensure that revealed that, as a Group, we exceed 2003/04 and there were no environmental Operations in the UK have been externally updates, team briefings, works councils our culture matches our commitment accepted standards on human rights as laid fines or enforcement actions against any To reduce our impact, we have a policy verified to ISO 14001 for four years and good relationships with recognised to corporate responsibility. During the out by the UN Universal Declaration of to share masts with other operators where year we gauged our employees’ attitudes of the operating companies. and mmO2 Group headquarters achieved trade unions in the UK. By 31 March Human Rights. A study of our employees feasible. Currently we operate a total of certification during 2003. All other 2004 70 per cent of our UK workforce to it through a Group-wide research showed we could do more on diversity 19,581 base stations. businesses in the Group are on track to was represented by trade unions. In mid- programme. The exercise generated a hence it became a Group-wide initiative. range of new ideas for our business Greener ways to work achieve certification by December 2004, 2004 we will hold the inaugural meeting Danuta Gray, Chief Executive Officer of O2 in line with our stated Group-wide target. of our European Works Council where and especially for the ‘Can Do in the Ireland, was appointed diversity champion Another way we can improve our Community’ programme. performance is to reduce the amount of Our environmental impact is also subject representatives from across the business for a new steering group in 2004. This travelling by our employees. This cuts fuel to external audits as part of our insurance will discuss Group performance with senior has generated O2’s vision for diversity use and emissions and is safer. As planned, programme. executives. and set out to address specific areas, as during 2003/04 we tested various green well as generated a human rights policy travel options for our employees in the which is available on our website UK and in Ireland. www.mmO2.com/cr/report2004. The assessment of human rights also asked for A travel survey by external consultants was improved reporting and measurement which also undertaken to establish existing travel has been followed-up by the introduction patterns to and from O2 offices. As a result of a new database system for our human resources function. We have not devised

26 mmO2 plc www.mmO2.com/cr/report2004 mmO2 plc 27 7630_CORE 5/7/04 12:04 pm Page 28

Workplace (cont) Disclosure guidelines on social responsibility Chart 1: Ethnicity (UK) Chart 2: Age profile (Group) Chart 4: Women in senior 25 Non-white management (Group) 11% 20 Chart 3: Gender (Group) 50 Not declared

8% White 40 81% 15 Male 53% 30 10

20 5

10 0 Female 47% 25% of senior White 81% < 20 2% 40 to 44 10% 0 Non white 11% 20 to 24 14% 45 to 49 6% O2 Ireland 48% managers are women Not declared 8% 25 to 29 23% 50 to 54 3% O2 UK (including Airwave) 23% O Germany, O Ireland and Manx Telecom are 2 2 30 to 34 23% 55 to 59 1% Male 53% O2 Germany 8% not able to provide ethnicity data due to legal

restrictions or because the data is not recorded. 35 to 39 18% Female 47% Manx Telecom 17%

a separate approach for AIDS and HIV the figure increased slightly to 25 per Training, development, reward Our pay negotiations with the UK trade The proportion of full-time workers in our Management of health and safety in programmes as this matter has not been cent. Group-wide, 102 out of 408 senior and recognition unions, the CWU and Connect, were UK call centres is 74 per cent, compared the operating businesses is externally identified through our operations or managers are women. We are continuing Across the Group we promote continuous concluded constructively during the year, to 66 per cent a year ago. During the year audited each year as part of our insurance

through stakeholder engagement. to monitor and challenge our performance learning, through on-the-job training, including the introduction of an adjustment we recruited 786 new staff to our call programme. O2 UK and O2 Ireland have here. See chart 4 for more details. knowledge sharing, projects, e-learning, to take account of performance, equal centres and increased the number of people achieved certification to the international At O2 we believe that diversity and equality workshops and development programmes. pay and market rates. we employ in O2 UK’s call centres. This health and safety system OHSAS 18001. has many facets. We want our managers We used our annual management pay Employees are required to agree personal measurement helped us retain the activity The management of health and safety to be knowledgeable and flexible in dealing review to address disparities between development plans with their managers to Reorganisation in the UK without out-sourcing it overseas. procedures of every operating business is with issues as wide-ranging as religious the pay and grading levels for men and get the right support and to track and We reorganised the Group last year. reviewed regularly through external audits, affiliation, dyslexia and the needs of women in the UK. In consultation with record progress. The main aims of the exercise, started in Health and safety which are carried out as part of our mothers returning to work part-time. We our management union, Connect, we set October 2003, were to get closer to our We have a Group-wide health and safety insurance programme. want to instil good practice into managing aside a part of the total remuneration Development activities last year focused on customers and devolve operational strategy, agreed at main Board level, which diversity in our day-to-day activities, such as bill to help rectify imbalances. deepening customer and market awareness responsibility more fully to the individual is championed by David McGlade, CEO of Managers regularly consult with trade recruitment, opportunities for job changes and on leadership. For example, within the businesses. It involved closing our UK- O UK and an mmO plc Board Director. The unions and other representative bodies on We are a member of the Employers’ 2 2 and personal development. Details about Isle of Man 99 per cent of all employees based products and online business and key health and safety issues for O2 employees occupational health and safety standards. the ethnic composition of our UK workforce Forum on Disability in the UK and aim to have attended ‘Customer Excellence’ events integrating its role within local operations. are car driving, repetitive strain injury, fire We are represented at the European are described in chart 1. offer genuine opportunity for employees to share experience and identify issues that The move led to 170 job losses. and ensuring a level of general awareness Commission Social Dialogue Committee with disabilities. To raise our awareness prevent us from delighting the customer. of health and safety at work. Health and Safety Working Group and we Through a renewed voluntary census check about the topic O2 Ireland is sponsoring We approached this challenge openly, comply with the key elements of the ILO we managed to encourage 85 per cent of the O2 Ability Best Practice Awards, an In March 2004 we began to enhance our explaining to employees why we needed We run a number of mandatory training Safety and Health Management System our UK employees to declare their ethnic annual business event to establish the performance review processes to ensure to strengthen our position for future programmes in all our operating businesses 2001, the UK’s HSG65 and the guidelines origin, and the proportion of undeclared first award system for best practice in everyone is clear about expectations, and growth and profitability. This was supported covering our policies and arrangements for documented in OHSAS 18001. Our accident individuals who participated in the survey employment of people with disabilities. to enable managers to evaluate performance by an internal communications programme, ensuring health and safety. In addition, O2 reporting arrangements are in line with the has dropped from 26 per cent to 8 per consistently and fairly. We have also created CEO and team briefings, including audio Germany and O2 Ireland have introduced ILO Reporting Code of Practice 1995. cent. The proportion of white employees To continue this work, we have been the Executive Development Programme, calls, and question and answer sessions. programmes on well-being, which cover rose to 81 per cent and that of non-white admitted to the Two Ticks scheme in the a leadership forum for around 100 of such things as social activities, sports and During 2003/04, there were 169 accidents to 11 per cent. UK, guaranteeing that we will interview our most senior managers. This is backed We consulted employee representative health screening. resulting in 557 days lost in sick absences. people with disabilities who apply for by three further tiers of leadership and groups and our trade unions. Those Based on our total workforce, this is We are increasing our support for events jobs with us and meet our criteria for management development, supporting who left the Group did so on redundancy During the financial year O2 UK introduced equivalent to 13 accidents and 43 days within different ethnic communities to qualifications. Two Ticks will be integrated those from team leader upwards. terms that exceeded statutory redundancy a drivers’ risk assessment and training lost in sick absences per 1,000 FTE. We are enforce the importance of tolerance into our new human resources online compensation and additional support was programme, a web-based package to assess making good progress towards our target and diversity. This year O2 UK sponsored recruitment system to ensure managers We want our people to know they are also offered through CV surgeries and driver knowledge, skill and risk avoidance of reducing work injuries by 10 per cent by an interactive photographic exhibition demonstrate compliance. valued through our pay and remuneration job-seeking workshops. techniques among employees, and gave March 2005. In 2003/04 we received two celebrating British Asian Youth and we policies and in our conduct day to day. ‘on road’ skills training for 132 employees. Almost half of our permanent workforce Call centres health and safety enforcement notices in sponsored Asian Mela festivals across Share-save schemes are offered to eligible the UK. Britain. In Ireland we were involved in is between 25 and 34 years of age. In employees across the Group. Each of our Converting employees from temporary the Chinese New Year festival. addition to the information presented in businesses runs its own recognition and employment to full-time status is an chart 2 we employ 29 individuals above reward schemes and in July 2003 our top important part of improving call centre We noted last year that 24.3 per cent of 60 years of age. achievers across the Group were informally performance. senior management posts were filled by entertained for a day by the Board. O2 UK women, even though they made up 40 ran a summer fun day, with some 4,000 per cent of the total workforce. In 2003/04 employees and family members attending.

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Community [GRI Reference: this section covers 2.22, 3.17, 3.19, EC10, TA4]

Chart 1: Total community Chart 2: Geographical Chart 3: Main areas contributions breakdown of involvement Environment 7% Management O2 Germany 13%

costs 24% O2 UK 67% Education 35% O Ireland 18% External view: “The Telecomputer bus project, for which Manx Telecom Time 2 Health is the biggest sponsor, offers whole classes of children and their teachers 1% Cash 62% 42% an important way to build their ICT skills. On arrival the bus connects to the school’s network to offer a really integrated approach where work In-kind Manx Telecom 2% created on board is saved directly back on the school’s server. Since being £1.7 million 13% launched in 1998, it has helped introduce many exciting projects and it contributed through Sports by has made a significant contribution to ICT skills across the Island.” community Other 14% community involvement group 2% John Thornely, Information & Communications Technology Adviser, Dept of Education, Isle of Man

We believe that companies that We particularly look to support initiatives charitable sponsorships and in-kind O2 Germany sponsored SCHOLA-21, an Ireland also supported Children’s Hour in We also enhanced our UK-only ‘Can Do respond to the needs of the where mobile services can be used to tackle contributions across the Group. Through interactive learning and information system association with the Irish Youth Foundation. Giving’ Scheme. This promises 20 per communities in which they operate social needs and where our employees can our recent membership of the London providing a technological network for This scheme invites employees to donate cent extra funding for every £1 donated are more likely to succeed. become involved. Our efforts focus on the Benchmarking Group (LBG) we continue students, schools and their teachers to one hour’s pay to support educational and by employees through payroll. During the ‘Can Do in the Community’ programme to improve our initiatives and learn from improve project work. SCHOLA-21 is social projects for disadvantaged young year it raised almost £95,000 for a wide We believe that we can also play an we launched in 2002. our peers. In 2004/05 we aim to improve part of the German Children and Youth people. 202 employees from our Irish range of charities. We have set a target important role in tackling social needs by our measurement and reporting on Foundation’s work to strengthen self- business supported the scheme. to increase the employee contribution providing innovative products and services Our approach community involvement through the confidence in young people. It particularly through ‘Can Do Giving’ by 25 per cent. that our customers want, and by giving In each of our markets we have identified LBG benchmarking model. A detailed focuses on building civic responsibility The UK project is Safe Moves. This pilot back knowledge, experience and resources key community issues that we want to breakdown of our community involvement and entrepreneurship, and on combating programme organised by The Foyer Mobile services benefiting the in ways that benefit many more. address through our community involvement. according to the LBG methodology can intolerance and violence. Federation and the UK Government’s community Before the launch of our ‘Can Do in the be reviewed through chart 4 on page 32. Connexions service aims to reduce Last year we reported a groundbreaking Community involvement is important, Community’ programme employees were In Ireland the charity of choice is the homelessness in young people by improving trial of a new asthma monitoring solution demonstrating that we look beyond narrow asked to identify key issues they thought Focusing on youth Irish Youth Foundation, which aims to life skills, independence and employability. in the Thames Valley region of the UK. We self-interest and that our brand and important and also to vote for the charity Last year, as a Group, we chose to help make a lasting difference to the lives of Launched in September 2003, O UK is provided funding, technical support, Xda technology have lasting relevance to society. 2 of choice. This process was supported young people overcome disadvantage, disadvantaged children. O2 Ireland providing funds and volunteering support combined mobile phones and computers In turn, a commitment to the community by a MORI survey that canvassed the escape crime and gain access to better sponsored the Communications and from our call centre in Leeds. and network capacity to record the breathing helps to protect and enhance our reputation opinion of the British public to community opportunities. Our employees voted the Information Technology for Youth (CITY) of asthma sufferers accurately, using and an and to motivate and retain our employees. involvement. In consequence each of International Youth Foundation (IYF) as project to upgrade an internet café in Employee involvement electronic peak flow meter attached to the Our local communities constitute local Our employees continued to give their our operating businesses has adopted its the Group’s Charity of the Year and we set Dublin’s Ballymun area with new computers, Xda from O2. Our partner in this project residents where we have communication own approach to community involvement, up projects supporting IYF in each of our supervised e-mail and internet surfing, time and imagination to a range of was e-San. masts, towns and cities that host our however, the overriding theme is focused operating countries. This year we will and help in funding an IT trainer for fundraising schemes. Group-wide, we offices and where we recruit employees, around youth. We continue to monitor measure the short-term effects of these. 10-19 year-olds. launched our ‘Can Do Matching’ programme This solution helped the 94 participants, our customers and other individuals and our approach through regular internal in April 2003, matching each employee’s aged between 12 and 55, to monitor organisations who can benefit from mobile and external surveys, which will be fundraising by up to £350. Funds for their own breathing and alert their doctors communications wider afield. discussed at Group-wide Corporate charitable causes were raised in various when an asthma attack threatened. Responsibility Forum meetings. ways including trekking in Nepal and custard pie throwing on the Isle of Man. In 2003/04 we made £427,000 charitable Take-up has gained momentum and, to donations in cash to community initiatives, date, we have had 112 applications from of which £192,000 was spent in the UK. individuals and teams, supported 91 charities In total we contributed £1.7 million in and together contributed £110,000 to charitable causes.

30 mmO2 plc www.mmO2.com/cr/report2004 mmO2 plc 31 7630_CORE 5/7/04 12:04 pm Page 32

Community (cont) Manx Telecom [GRI Reference: this section covers TA3]

Separate reviews dedicated to other operating businesses are available in print and online at www.mm02.com/cr/report2004

The London Benchmarking Group Model Graph 4: LBG categories

Intermittent support to a wide range of good causes in Management 24% Charitable gifts 9% “As a fully integrated telecom company, providing mobile, Charitable response to the needs and appeals of charitable and gifts community organisations, increasingly through partnerships between the company, its employees, customers and suppliers. fixed and internet communications for the Isle of Man, we have Long-term strategic involvement in community partnerships Community to address a limited range of social issues chosen by the investment company in order to protect its long-term corporate interests the opportunity to make a difference to our community in a and to enhance its reputation. Commercial Activities in the community, usually by commercial initiatives 9% number of ways. As the major supplier of telecommunications Commercial initiatives departments, to support directly the success of the company Community in the community promoting its corporate brand identities and other policies, in investment 58% partnership with charities and community-based organisations. we have a special responsibility to local society which we

The core business activities in meeting society’s needs for Business basics cost-effective goods and services in a manner which is exercise with care.” ethically, socially and environmentally responsible.

We were particularly aiming to encourage “Manx Telecom has been a leader in Community investment Mast siting Our community investment activities are Manx Telecom aims to adopt and adapt regular self-monitoring and are pleased to The LBG model helps businesses to improve the management, measurement and reporting of their technology. We were the first in primarily designed to help people make best practice from within the Group to meet report that 65 per cent of people in the trial corporate community involvement programmes. It moves beyond charitable donations to include the Europe to set up and operate a 3G did comply, compared with less than 50 per full range of contributions (in time, in kind and in cash) made to community causes, and assesses the better use of communications technology. the needs of the Isle of Man and, for example, cent of sufferers monitoring themselves in actual results for the community and for the business. (See www.lbg-online.net for more information) network, and the trials we carried The Telecomputer bus continues to be a within the Ten Commitments drawn up by useful resource for schools across the island, the Mobile Operators’ Association in the UK, normal ways. With 100 per cent electronic As managers of the Group, we have worked with mmO2 plc [O2] to review its understanding of the out are informing the sort of accuracy, the trial aimed to alert doctors to LBG model and its application to the wide range of community programmes. Our aim has been to enabling children and their teachers to the Isle of Man has an additional requirement services O2 will progressively be adverse readings, so that they could intervene ensure that the evaluation principles are correctly and consistently applied. Having conducted an access broadband internet. for planning permission for all mast sites, quickly and warn patients of the need to assessment, we are satisfied this has been achieved. Our work has not extended to an independent offering to 3G customers in other which provides additional independent vetting. audit of the data. Much of our investment is geared towards treat themselves. regions. The early renewal of our youth, education and health. We provide This is the first year that O has applied the model. The company has made commendable progress in Environment 2 15 year licence with the Manx work placements for young people with Overall, 78 per cent of trial participants accurately calculating the costs of its community contribution (inputs) and in starting to assess what We continue to try to limit the environmental said they were satisfied or very satisfied the programme is achieving, in terms of additional resources attracted (leverage), community benefits Government includes a requirement special needs at our offices and support impact of our operations and have now with the system, while the same proportion and the business case (outputs and impacts). Going forward, one challenge is to extend this for us to pass on cost savings to several youth sports teams. We are currently introduced the Fonebak scheme supported evaluation to include the full range of employee involvement options. extending O2 UK’s successful asthma trial to agreed that the solution improved their customers in terms of lower prices by Shields Environmental. Our first donation monitoring abilities. Nearly 60 per cent said In reviewing the programme this year, we were also impressed by the way the company has formed the Isle of Man, working with e-San Ltd and to charity from recycled mobile phones will their symptoms improved as a result. We charity partnerships to explore new ways of applying its technology to benefit people in need, notably for phone and broadband services. the Isle of Man Department of Health and be used to support local environmental are now awaiting analysis from doctors, on cystic fibrosis and asthma. By engaging the business in this way, the concept of ‘community We are delighted that our work to Social Security to implement a trial local causes. In partnership with the Department contribution’ moves away from narrow cash donations and the ability of the company to make a covering nearly 11,000 readings, and we service designed to improve the quality of of Local Government and the Environment real difference is enhanced. upgrade every exchange to support expect scientific appraisal to be published treatment for young asthma patients. We we also recycle telephone directories and in medical journals. ADSL technology is complete, are also supporting the Mighty Oaks some of our network equipment, for example The Corporate Citizenship Company allowing some 98 per cent of Appeal, which aims to raise £3 million over telegraph poles. We are working towards We have now launched a second project www.corporate-citizenship.co.uk two years for a new 12 bed hospice. Our sourcing renewable energy in line with with e-San Ltd to help cystic fibrosis premises in the Isle of Man to have 30 June 2004 employees staged a custard pie event last O strategy. We are on our way to achieving sufferers. This illness is different because access to broadband technology. 2 year which raised £3,500 for this appeal. registration to the international environmental it involves primary care. Our trial is with We believe we have a major role standard ISO 14001 by December 2004. the Bristol Royal Infirmary and will run We support the Crimestoppers initiative on across England and South Wales to help in e-enabling our community and the island and are represented on its board. reduce the need for hospital admission attracting new inward investment We are also promoting internet usage and to significantly decrease the cost of to the island.” through support for the Help the Aged the illness to the National Health Service. drop-in internet centres.

Chris Hall, Managing Director, Manx Telecom

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Group targets

Achieved Failed On target On-going New

Category Objective Target Status Timeline Category Objective Target Status Timeline Management Health & safety To engender a culture within the Company that Achieve zero enforcement actions by the health On-going Strategy Embed the management of social, environmental and Establish key performance indicators for each Sept 04 demonstrates a zero tolerance of injury or ill health arising and safety enforcement agencies. ethical issues into the mainstream of our business. operating business to be included in the from work activity. Two enforcement notices received in the UK. performance management structure of O2. Community External dialogue Continue our engagement with stakeholders to ensure Establish a system for capturing and sharing the March 05 continuous responsible management of our business. information we acquire through stakeholder dialogue. Community The objective of our community investment work is to use Measure the short-term effects of our current major On-going investment our main assets appropriately to demonstrate that mobile community involvement projects. Marketplace technology can have far-reaching and positive effects. Protecting the We aim to implement the Code of Practice on adult Implement the UK Code of Practice. Dec 04 Increase the participation and contribution of March 05 vulnerable content, to ensure that we can protect children and other employees through ‘Can Do Giving’ by 25 per cent. June 04 vulnerable people from accessing inappropriate content. Launch of the Irish Code of Practice. Targets achieved during 2003/04 Supply chain We aim to continue our efforts of implementing our ethical Continue our engagement with our main suppliers On-going Management and environmental procurement policies. and commence procedures for engagement, Communications Raise awareness about corporate responsibility Internal information campaign. July 03 including the distribution of self-assessment amongst employees. questionnaires to our smaller suppliers that have a medium to high ethical risk profile. External Continue to open ourselves up to scrutiny so that our Broaden the scope of our internal and external March 04 Health verification performance can be properly judged and benchmarked audits to cover a wider range of corporate and areas for improvement clearly highlighted. responsibility issues. Health research We are committed to help fund and support further Fund independent and peer reviewed research into On-going independent research into alleged health risks of mobile the alleged health effects of mobile communications. Risk-management Continue to develop our approach to managing social, Develop a wider corporate responsibility scope for March 04 communications. environmental and ethical risks and remain actively involved our operational risk reviews that form part of our in the development of good corporate governance. insurance programme. Environment We aim to act responsibly in all matters of health and Improving our means of informing the public and March 05 and health safety, we aim to provide clear information about how employees about health issues, using the intranet, External Extend our programme of external dialogue firstly in the Research current stakeholder engagement. March 04 our technology works, we try to manage public concern our external website, and by reviewing the contents dialogue UK, and then on the Isle of Man, in Ireland and Germany. through risk communication. of our leaflets to cover future technology applications On-going and by ensuring that clear health and safety Develop procedures for increased consultation. information is available with the products we sell. Business Continue to encourage confidential reporting by Further enhance our reporting system and include Nov 03 Environment and sustainability principles employees of breaches of our code of business ethics and compliance monitoring in internal audit plans. Environmental Consistent approach to environmental management across All businesses certified to ISO 14001 by end Dec 04 monitor actions taken to investigate such reports. management the business. of 2004. Business Encouraging all employees to abide by our Business Compliance with Turnbull, Sarbanes-Oxley (this is March 04 Fuel storage All stored fuel has secondary protection. 100 per cent of all tanks to be double layered March 05 principles Principles, we also aim to persuade others working with a specific reference only to the whistleblowing and achieve zero enforcement actions by the us to embrace them as well. requirements) and the Business Principles is brought environmental agencies. together in terms of risk management, certification Double skinned tanks not achieved, new target and internal audit procedures. March 05. No enforcement actions. Marketplace Waste To work towards a more integrated and better To increase the proportion of office waste recycled March 05 Customers Ensure we can meet the needs of our customers and Implementation of customer-centricity strategy. March 04 monitored approach to waste management with by 10 per cent. deliver excellent service to them, wherever they are. the aim of minimising waste. Environment Supply chain Explore opportunities for managing computing Research various opportunities for handling New target Recycling Roll out handset recycling schemes across the business and Increase the number of redundant handsets March 04 (environment) waste, in terms of hardware. computing waste. March 05 instigate initiatives that encourage stakeholders to hand in recovered by 100 per cent. Target not achieved within timeline. their redundant kit. Ozone Minimising our negative environmental impact. Reduce refrigerants and CFC gases by 10 per cent March 10 Re-use Explore opportunities for end-of-life base station equipment. Instigate a project to look at how we will deal with March 04 depleting per unit turnover by March 2010 – aspiration to be the end of re-usable life for base station equipment. gases 100 per cent refrigerant-free in the long term. Supply chain To ensure that our suppliers where appropriate have Develop an environmental questionnaire, and send March 04 Integrated Reduce fuel consumption, CO emissions and the health Increase the use of audio, video and web conferencing March 05 2 (environment) good environmental credentials supported by a robust this to at least 20 of our suppliers. environment and and safety risk of our employees when driving. this year by 10 per cent, with evidence of proportionate environmental management system. health & safety reduction in mileage against 2002/03 data. Target not progressed due to difficulties in obtaining Energy We seek to lower our levels of energy use. Aim to increase the proportion of electricity we source March 08 transport data. from renewable sources to at least 10 per cent. Workplace Workplace Equal Addressing our recruitment policies, pay reviews and Develop an action plan to reflect the aspiration of the March 05 Human rights We will address weaknesses identified in recent assessments Develop a detailed action plan. August 03 opportunities equal pay monitoring to reflect an integrated approach diversity steering group. of our approach to diversity and human rights. & diversity and to establish a drive for inclusiveness for our business. management Community Measure the impact of our work in the community to Instigate specific research to cover all of our major August 03 Health & safety Ensure a consistent approach to managing health and To reduce the number of days of sick absence from March 05 ensure our investment is delivering benefits to society and community investment projects. safety across the Group and that the significant hazards work-related injury or illness by 10 per cent. associated with our undertakings are identified, assessed to the Company. and wherever possible eliminated, reduced or the subject of management controls.

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Assurance statement mmO Website: www.mmO2.com/cr/report2004 2

[GRI Reference: this section covers 2.20, 2.21] E-mail: [email protected] plc Corporate responsibility report 2004 Telephone: +44 (0)113 272 2000

mmO2 plc Legal and Corporate Affairs Corporate Responsibility To the Management of mmO2 plc 4. Testing claims made in the Report regarding Responsiveness Global Reporting Initiative Cautionary statement regarding forward-looking statements O ’s corporate responsibility performance by Wellington Street We have been asked to review mmO2 plc’s (O2) 2004 2 Has O2 responded to stakeholder concerns? mmO plc has elected to present this Corporate Responsibility report This document contains certain forward-looking statements. reviewing evidence provided by O . 2 corporate responsibility report (the Report) in order 2 by following the guidelines of the Global Reporting Initiative (GRI) We may also make written or oral forward-looking statements in: Slough, Berkshire to provide assurance on its contents. O is responsible –We consider that the Report’s scope and content 2 (www.globalreporting.org). GRI has produced Sustainability Reporting SL1 1YP for the collection and presentation of information Level of Assurance addresses issues expressed in the stakeholder – our periodic reports to the US Securities and Exchange Commission, Guidelines (2002) using a set of ‘core’ and industry-specific indicators. United Kingdom within the Report. There are currently no final guidelines for levels of engagement outputs provided to us by O2. also known as the SEC, on Forms 20-F and 6-K; assurance when using the AA1000 Assurance –We have observed policies, programmes and The latter include those for the Telecommunications sector. In addition the – our annual report and accounts and half-yearly reports; Registered No. 4190833 Our responsibility in performing this work is to the Standard. We planned and performed our review discrete activities aimed at addressing a range of GRI has defined five conditions that an organisation’s report must meet to – our press releases and other written materials; and management of O2 only and in accordance with the to obtain information and explanations that we issues raised through stakeholder engagement. be ‘in accordance’ with the guidelines. This report has been independently – oral statements made by our officers, directors or employees terms of reference agreed with them. We do not considered necessary to form our conclusions on the It is recognised that the response taken is O2’s assessed by Dr. Malcolm A. Shaw – it clearly follows the 2002 guidelines and therefore accept or assume any responsibility for any Report within the terms of reference agreed with judgement and may not always be consistent to third parties. is in accordance with them. This analysis, cross-referenced to the report’s other purpose or to any other person or organisation. O2 management. with the expectations of all stakeholders. content, can be found within each section of this report and in greater Any reliance any such third party may place on the – The Report, which is published annually, is available We have based these forward-looking statements on our current plans, Report is entirely at its own risk. The limitations of our review in English, which is the first language for a large detail on the website at www.mmO2.com/cr/report2004. expectations and projections about future events. These forward-looking Our review did not include: proportion of O2 employees and stakeholders. The statements are subject to risks, uncertainties and assumptions about us. What we did to form our conclusions O2 Germany section of the Report will be available Forward-looking statements speak only as of the date they are made. There are currently no statutory requirements in –Testing the processes for gathering or reporting the various data presented in the Report. in German for the first time this year. the UK in relation to the independent review of The mmO2 plc Group report has been edited Statements that are not historical facts, including statements about our beliefs Therefore, we provide no assurance on the corporate responsibility reports. The AA1000 Evidence and approved by Plain Language Commission. and expectations are forward-looking statements. Words like ‘believe,’ ‘anticipate,’ completeness, quality and accuracy of it. Assurance Standard sets out principles for social and Claims and statements: ‘expect,’ ‘intend,’ ‘seek,’ ‘will,’ ‘plan,’ ‘could,’ ‘may,’ ‘might,’ ‘project,’ ‘goal,’ – Observing or conducting stakeholder environmental report assurance. We have been asked ‘target’ and similar expressions often identify forward-looking statements but are by O to set out our conclusions by reference to the engagement activities. Therefore, our conclusions –We have tested claims and statements made in 2 not the only ways we identify these statements. assurance principles described in the AA1000 on materiality and responsiveness are based on the Report regarding O2’s corporate responsibility the review of outputs of stakeholder engagement performance by obtaining supporting evidence Assurance Standard. These statements may be found in this document generally. Our actual results provided to us by O2. from O2. Where O2 could not provide sufficient Our review consisted of the activities outlined below: –Testing whether the Report had been prepared supporting evidence the text has been revised could differ materially from those anticipated in these forward-looking statements in accordance with the Global Reporting Initiative or removed. as a result of various factors, including all the risks discussed in the above- 1. Interviews with a selection of O2 Guidelines. mentioned reports, releases and statements. management and functional staff at mmO2 –Testing the scope of the Report against issues Our independence plc headquarters in Slough to understand the Ernst & Young has not previously advised O on any If any one or more of the foregoing assumptions are ultimately incorrect, our actual reported on by O2’s peers. 2 current status of corporate responsibility activities aspects relating to the organisation’s approach to results may differ from our expectations based on these assumptions. Also, the and progress made during the reporting period. Our conclusions corporate responsibility or any business processes sector and markets in which we operate may not grow over the next several years Based on the scope of our review our conclusions relating to the management of the issues discussed 2. Visits to selected O operating businesses to as expected, or at all. The failure of these markets to grow as expected may have a 2 are outlined below: in the report. review the systems and processes in place for material adverse effect on our business, operating results and financial condition managing and reporting corporate responsibility Materiality Our assurance team and the market price of our ordinary shares and American Depositary Shares. issues at the operating businesses and to review Has O provided a balanced representation Our assurance team has been drawn from our UK 2 The information on our website, any website mentioned in this document or any evidence in support of claims made in the of material issues concerning O ’s corporate corporate responsibility team. All members of the 2 website directly or indirectly linked to our or any other website mentioned in this Report regarding O2’s corporate responsibility responsibility performance? team are experienced in social and environmental performance. The operating businesses assurance having worked on similar engagements for document is not incorporated by reference into this document and you should visited were: – The Report provides a balanced representation a number of significant UK and international businesses. not rely on it. of material aspects concerning O2’s corporate –O2 Airwave responsibility performance. –OGermany in Munich 2 –O2 has undertaken a series of research activities –O2 Ireland in Dublin and the customer care described in the ‘our approach to corporate centre in Limerick. responsibility’ section which have informed the Ernst & Young LLP selection of issues to be reported. 3. Testing the scope and balance of the London, 30 June 2004 information contained in the Report against: Completeness – Internal documents such as Board minutes Does O2 have complete information on which Design and Production: salterbaxter and papers, Executive Committee minutes to base a judgement of what is material for Writing and Research: Simon Beavis Photography: Group report: George Brooks. Operating business reviews: John Edwards and papers and Corporate Responsibility inclusion in the Report? Advisory Council minutes. –We are not aware of any material issues excluded or The print production of this report is Carbon Neutral®. – A selection of external media sources misstatements made in relation to the information Printed by Beacon Press using their environmental print technology. relating to O2’s management of corporate provided to the Corporate Responsibility Advisory The paper is endorsed by the Forest Stewardship Council and is made up of 25% FSC responsibility issues. Council on which judgements are made in respect endorsed pulp and 75% post consumer waste. The printer holds FSC Chain of Custody (Certificate number SGS-COC-0620) FSC Trademark© 1996 Forest Stewardship Council – Outputs of employee engagement of progress against corporate responsibility and the A.C. No film or film processing chemicals were used and 95% of the cleaning solvent commissioned by O2 and conducted by an content of the Report. was recycled. CO2 emissions are only 2.8 tonnes per million sheets printed. external agency on its corporate responsibility – The processes for reporting progress in corporate performance. responsibility activities are being revised. Corporate The electricity was generated from renewable sources and vegetable based inks were used throughout. The printer is registered to environmental management system – External feedback provided to O2 on the responsibility reports will be provided to the O 2 ISO 14001 (Certificate number E9586 and EMAS, the Eco Management and Audit 2003 Report. Executive Committee each quarter for review – Outputs of the 2003 stakeholder Scheme (Registration number UK-S-00011). On average over 84% of any waste along with progress against relevant key associated with this product will be recycled. engagement conducted by an external performance indicators that are being developed Beacon Press is a Carbon Neutral® company. agency. for each operating business. is a Millennium Product. FSC Trademark© 1996 25% Forest Stewardship Council A.C Minimum

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Website: www.mmO2.com/cr/report2004 2

Design and Production: salterbaxter Writing and Research: Simon Beavis Photography: Group report: George Brooks. Operating business reviews: John Edwards