A Changing World

A changing world CORPORATE RESPONSIBILITY REPORT 2005 Our Vision – to be the essential wireless brand by enriching people’s lives whatever they’re doing, wherever they are.

When we launched O2 three years ago we set out to be bold, open, trusted and clear. Since then we have put a lot of hard work into making sure we operate as a responsible business and really live up to these values, which always revolve around you – the mobile user. We wanted the benefits of our mobile services to reach as many people as possible. We also wanted to comply with best practice so that we could stand up to close scrutiny and account for our actions in an open and honest way. This continues to be our approach. To instil corporate responsibility further into our organisation we believe we should:

• provide easy-to-use and fairly priced products and services • improve our performance continuously • take proper account of social, environmental and ethical concerns and manage our impact on the environment and society effectively • understand the needs and opinions of a wide range of stakeholders • give our employees a safe, well-balanced and stimulating workplace • support and energise the communities we serve. We have made some good progress, but know we still have much further to go. This O2 plc report sets out our progress to date. Summary of key events in 2004/05

15% Compliance to UK Code 81% Substantial increase increase in permanent of Practice for the self- of employees are ‘proud in CO2 emissions employees Group-wide regulation of new forms to work’ for O2 due to increase in of content on mobiles communications networks Awarded Best Place O2 plc – best wireless to Work in Ireland communications 43rd Company in the Dow (2004: 32nd) Jones Sustainability Index 30% All operating businesses position in the increase in community registered to BITC Corporate investment contributions ISO14001 Responsibility Index Around across the Group 80% Manx Telecom drop in phones recycled Polly and Fred education Airwave – completion of help employees to tool introduced to the UK’s first National Police fundraise for the island’s German curriculum by Communications Service first hospice with a Launch of major support of O2 Germany on time and on budget children’s unit ‘customer centricity’ programme to create around 2,000 new Around 75% 56% jobs in the UK 50% increase in recycled reduction in HCFC of general waste Around office waste by ozone-depleting recycled O2 Germany refrigerant gases 4,000 massages delivered Electricity sourced O2 Germany – to UK employees at from renewable 11th their desks sources reaches in Best Places to 30% Work as ranked by in Ireland business magazine Capital

www.o2.com/cr/report2005/events 1 Contents

3 We need to go further 23 Sustaining – Caring for the environment A message from Sir David Arculus, Chairman O2 plc At O2 our activities focus increasingly on sustainable development – achieving a responsible balance between economic, social and environmental considerations. 4 Concentrating on the customer An introduction from Peter Erskine, 23 Our environmental impact | 24 Managing waste | Chief Executive Officer O2 plc 24 Recovering handsets | 25 Upgrading network equipment | 25 Reducing waste from our offices and shops | 26 Energy consumption and greenhouse gas emissions | 27 Transport 5 Group overview emissions | 27 Environmental procurement | 27 Ozone-depleting refrigerant gases | 27 Local pollution risk

7 Engaging – Our approach to corporate responsibility 29 Balancing – A better place to work Today the mobile phone is a widely used, everyday product. Our aim is to provide the conditions, business strategy, rewards It has mass appeal, offering exciting ways to keep in touch and work/life balance that will give our employees real pride and interact. working for O2.

35 Involving – Action in communities 13 Accessing – In the marketplace We are very proud of the strong community spirit in O2. From childhood to adulthood, in towns and in villages, at home and at work, the mobile phone contributes to 35 Encouraging employee involvement | 35 Local action | the lifestyle, convenience and safety of at least 1.5 billion 35 Youth and education | 36 Inclusion, health and wellbeing | individuals worldwide. 36 Environmental protection | 36 O2 Community Awards Event | 37 Emergency relief | 37 Fundraising by text | 37 Benchmarking | 13 Appropriate mobile services | 14 Content standards | 37 Community assurance statement 14 Protecting young people | 15 Gambling | 15 Inclusive services | 15 Customer focus | 16 New services | 16 Pre-pay registration | 17 Competition, regulation and economic impact | 38 Manx Telecom 17 Ethical procurement | 17 Industry co-operation on ethical O2 UK, Airwave, O2 Ireland and O2 Germany – supply chain issues can be found either on the backside of this report or at www.o2.com/cr/report2005

19 Protecting – Operating responsibly There is much public debate about whether mobile phones, 40 Targets and Objectives base stations and antennas cause adverse health effects – and we aim to provide the best information available today. 42 Report assurance statement 19 Exposure to radio frequency (RF) waves | 20 Independent research | 20 Handsets | 20 Masts and network build | 21 Mast sharing | 21 Industry co-operation | 21 Informed debate | 21 Driver distraction | 21 Health monitoring through mobile communications

2 www.o2.com/cr/report2005 We need to go further A message from Sir David Arculus, Chairman O2 plc

GRI References: 1.1, 1.2, 3.18, 3.19 and 3.20

O2 operates in one of the most As Chairman my role is to lead and inspire of funding for independent research, and we dynamic sectors of the economy. from the top. I have set out to make clear continue to work towards ensuring that our In a relatively short time the mobile that whilst we want to create value for masts are sited sensitively through public phone has become a mass consumer our shareholders, we also have a duty to meetings, consultation, and a dedicated helpline. product, seen by most people as an contribute to wellbeing and safety in the indispensable part of life, at home community. Indeed I do not believe we can Our efforts to reduce our environmental and work, and a force for good in do one without the other. I know we will impact are bearing fruit. We have reached our society. With innovative new products have succeeded when 100 per cent of our highest level of electricity from renewable and socially useful services emerging employees are proud to work for O2, live sources, whilst 48 per cent of our office waste all the time we are confident this will to the highest levels of integrity, and pursue has been recycled. We were the first mobile remain the case. the most responsible business practices. operator to achieve accreditation to the This report shows that we have made great environmental management standard Since becoming Chairman I have been progress in this regard, and also sets out ISO 14001 across all our operations. impressed by the commitment and enthusiasm some of the ways in which O2 takes its Over 80 per cent of our employees say they of O2 people, evidenced by the building of a responsibilities seriously. successful business, and ensuring that mobile are proud to work for O2. In Ireland we have is a force for good. Whether it is delivering a We believe we have successfully embedded been recognised as the Best Company to fun ringtone or an important message from the social and environmental significance of Work For with more than 1,000 Employees, a relative, whether it is sending a vital piece what we do throughout our business. We and are in the top 5 best workplaces in of information to a police officer on the street believe we have put in place the structures Europe. or enabling a donation to a charity, or whether and processes to ensure that the strategic We have completed the roll-out of the UK’s it is simply letting people talk to each other, framework adopted by the O2 Board is being first national police communications service O2 is focusing on enriching people’s lives and delivered through every business decision we which is already helping to build safer contributing to safer communities. make. Backed up by risk management, communities by delivering communications internal audit, remuneration based on meeting where and when it is most needed. Of course, we start from an ambition to targets, and external auditing of this report, provide great experiences, good products and we have succeeded in remaining the highest Beneath the headlines lies a detailed attention excellent service to all our 24 million customers scoring mobile operator in some of the key to the particular impact we can make on in the UK, Germany, Ireland and the Isle of indices. O2 was also awarded best Corporate individuals. Of course there is more to do. Man. We are also determined to ensure that Responsibility Programme of the Year in the We met most of our corporate responsibility in every way we touch people’s lives it is for European Strategic Risk Management Awards. objectives this year, and we have set additional the better, and adverse impacts are minimised. and more demanding goals for 2005/06. We have clear strategic objectives: We are trying to meet our social obligations in We will continue to measure and monitor a number of ways. Most notably the work we our impact on the physical environment and • to make our employees proud to be have done to make sure that mobiles are safer on society. We strive towards excellence. working for O2 – whilst observing highest for children to use, with information leaflets, levels of ethical business conduct; texting clinics and technology to prevent • to achieve continuous and measurable access to inappropriate contact and content. improvements in our operations in all areas that affect our customers, the physical We have made efforts and investments to environment and society; ensure that the best possible knowledge • to be proactive in developing exciting about the health effects of mobile is available Sir David Arculus, mobile services that contribute to wellbeing to all our customers. We have recently Chairman O2 plc and safety in society. committed a further half a million pounds 24 June 2005

www.o2.com/cr/report2005/statements 3 Concentrating on the customer An introduction from Peter Erskine, Chief Executive Officer O2 plc

GRI References: 1.2 and 3.19 “Corporate responsibility sounds like a dry concept. But it describes a significant shift in business thinking, forcing us to ask important questions about the balance of how we do things.”

2004/05 was a busy and successful year switch more of our resources, including an extra Corporate responsibility sounds like a dry for O2. Yet I believe we grew stronger 2,000 staff, to the front line of customer service. concept. But it describes a significant shift in last year by holding on to a simple This means that now around three quarters of business thinking, forcing us to ask important idea – that we should pace ourselves our employees will be directly customer facing. questions about the balance of how we and concentrate on doing a few do things. important things exceptionally well. Customers also want to be comfortable with us as a company. They want to be able to There is, for instance, a balance between what We were not, for example, among the first trust us. That’s why we need to show that we want to offer our customers, people inside to launch 3G services, because we wanted we behave responsibly and with due care. the Company and the communities we serve. to make sure important elements – network This influences people’s choices, as consumers If we want to provide real value for our quality, functioning handsets, trained staff and as citizens. It makes absolute business customers it is essential we value the people and compelling content – were in place first. sense to devote the time and effort we put who work for O2. We can only serve a wide into responding to the concerns of customers range of customers with modern products Nonetheless, we were at the forefront in and other stakeholders. Only by increasing and services if we provide an inclusive and highlighting the potential hazards of mobile our dialogue with them can we really hope modern workplace. We can only make a real content to young people, providing parents to understand and respond to their needs. difference in our communities when we give with the necessary information to allow them We are committed to increasing that dialogue. our employees the opportunity to bring their to understand and manage their children’s energy and ideas to our community use of phones safely, protecting them from People in O2 understand that meeting the programme. Being serious about the safety harmful content and contacts that can occur needs of our customers is critical. We made of our customers and the public goes hand- through mobile internet access. We aim to it a priority last year to stress its importance in-hand with safeguarding the wellbeing of further improve our communications in this in presentations to employees. And we have our employees. field over the coming year. given each of our operating businesses – in the UK, Germany, Ireland and the Isle of Man This report has been prepared in accordance This is part of the increased focus we are – the lead role in making sure responsible with the 2002 GRI guidelines. It represents a giving to our customers. practices are being applied across our balanced and reasonable presentation of our operations. Why? Because they are closest organisation’s economic, environmental and Our customer centred strategy recognises to our customers and best placed to respond social performance. that – in a fiercely competitive marketplace, to people’s needs and concerns. where people are happy to shop around for You may well want to know more or to share the lowest prices and the latest devices and This report will give you many examples of your views with us. If so, please get in touch services – quality, value and innovation are how we have taken this work forward during using the contacts at the back of this report. what will really set O2 apart from the crowd the year. You will see it in our environmental and make our customers come back to us performance, where we were the first mobile time after time. operator to achieve ISO 14001 accreditation for all our operating businesses. You’ll see it Customers want excellent technology, in the work we are doing in all our markets to compelling products and services, useful and make mobile services safer for young people entertaining content, simple and clear pricing. and the progress we are making in areas such We want to be better than our competitors at as employee wellbeing programmes and in Peter Erskine, providing these things. That’s why we marked our ‘Can Do in the Community’ investment Chief Executive Officer O2 plc the end of our financial year by promising to initiatives, which go from strength to strength. 24 June 2005

4 www.o2.com/cr/report2005/statements Financial Group overview continuing operations GRI References: 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.8, 2.11, 2.13, 2.14, 2.15, 3.18, PA4 and EC1. highlights (Year ended 31 March 2005)

Customers We are a leading provider of mobile Airwave completed the roll-out of its radio communications services in Europe communications service to the 51 police forces 24m with wholly-owned businesses in the of England, Wales and Scotland in March, on United Kingdom, Germany and Ireland. time and within budget. More than 100,000 Group turnover officers are now equipped to use Airwave. O2 also provides radio communications to The network has been developed under a £6,683m police forces and other public safety users £2.9 billion, 19-year public finance initiative through the Airwave business and full range contract from the UK Government. of fixed, mobile and internet services on EBITDA the Isle of Man. As at 31 March 2005, Manx Telecom continued to provide a 1 we employed 14,914 FTE people across complete range of telecoms services on the £1,768m the Group (equal to 16,059 people in post). Isle of Man during the second year of a 15-year licence from the Manx Government. Operating profit All our operating businesses trade under (before goodwill, UMTS (3G) the O2 brand name, with the exception of Networks and services licence amortisation and Manx Telecom. As mobile devices become more sophisticated, exceptional items) more people are taking advantage of the new In 2005 we carried out a capital reorganisation services we offer on our 2.5G (GPRS) £755m under a Scheme of Arrangement in accordance networks, such as downloading music and with section 425 of the Companies Act 1985, sending picture messages. Towards the end Group reported pre-tax profit as a result of which a new holding company of the year we launched 3G services in the O2 plc was inserted. United Kingdom and Germany. This will £309m provide access to more data-rich services, In the year ended 31 March 2005 – the period such as video messaging. Corporation tax paid covered by this Corporate Responsibility report – we recorded pre-tax profits of £309 million We recently announced that we will launch £15m (2004: £95 million) on sales of £6.7 billion a mobile internet service based on ‘i-mode®’ (£5.7 billion). We increased our customer base technology in 2005. This will make our 3G Capital expenditure by 16 per cent to 24 million, with growing offer richer and complement the popular numbers of subscribers in each of our 2 O2 Active portal. main markets. £1,415m Strategy This report covers all our wholly owned Year-end net debt Our strategy aims to put our customers at the businesses, excluding joint ventures we have heart of everything we do. This means offering set up with leading retailers in the UK and the best overall customer experience, including £78m Germany, Tesco Mobile and Tchibo Mobilfunk the in-store experience, our online presence, respectively. We also mention our involvement excellent customer service and making it Employees (Full-Time in the Starmap Alliance with 10 other Equivalent, FTE) simple for customers to use new products and European operators, who are co-operating services. We do not necessarily want to be the 3 on purchasing and roaming across Europe. first to market but we do want to be the best. 14,914 This extends from simple pay-and-go facilities The operating businesses to specially adapted technology for the hard Cost of employment O2 UK’s customer base continued to grow of hearing or disabled. Our customers sent a 4 during the year and at 31 March 2005, total of 14.5 billion text messages in 2004/05 O2 UK had 14.38 million customers, an £613m and new data services such as mobile email, increase of 8.4 per cent on prior year. Revenue picture messaging and music downloads are 1 growth in Ireland was strong too, with the EBITDA is our earnings before interest, growing quickly in popularity. tax, depreciation, amortisation and number of subscribers increasing by 10.2 per exceptional items, excluding our share of cent over the year to 1.53 million. O2 Germany the operating profits and losses of our We aim to provide high-quality mobile services joint ventures and associates. delivered strong revenue and EBITDA growth – in innovative ways, competitively priced and 2 O2 UK £638m; O2 Germany £445m; with customer numbers growing by in packages and bundles to suit a range of O2 Ireland £100m; Airwave £218m; approximately two million in the year, individual needs. We are determined that our Manx Telecom £10m; and to 7.98 million as at 31 March 2005. Central resources £4m customers, whoever and wherever they are, 3 UK 9,141; Germany 3,919; find our products and services highly valuable Ireland 1,577; and and rewarding. Isle of Man 277 4 UK £361m; Germany £184m; Ireland £58m and Isle of Man £10m www.o2.com/cr/report2005/businesses 5 Today the mobile phone is a widely used, everyday product. It has mass appeal, offering exciting ways to keep in touch and interact.

6 www.o2.com/cr/report2005/engaging Engaging

OUR APPROACH TO CORPORATE RESPONSIBILITY

Today the mobile phone is widely used as an We like to take account of the social, BITC AND GRI REFERENCES everyday product. It has mass appeal, offering environmental and ethical effects of our MANAGEMENT exciting ways to keep in touch and interact. business by identifying, managing and 1.1, 2.9, 2.10, 2.12, 2.13, 2.17, This challenges us to think beyond the balance reviewing our approach to these corporate 2.20, 2.21, 2.22, 3.1, 3.3, 3.4, 3.5, sheet and standard products and to understand responsibility issues. It is a daily challenge the wider issues of consumer thinking. requiring sound processes and published 3.6, 3.7, 3.9, 3.10, 3.11, 3.14, 3.16, performance targets to keep us on track. 3.19, 3.20, HR8, HR13, PR3, PR9, Our response is to put our customers at We are starting to encourage our operating PR10, SO2, SO4 and SO7 the heart of our everyday activities. We want businesses as well as our suppliers to take our services to be accessible to all, making life into account the social, environmental and easier and more enjoyable. And we want to ethical impacts of their operations. ABI REFERENCES extend the benefits of our powerful applications 1.1, 1.2, 1.3, 1.4, 2.1, 2.2, 2.3, 2.4 to society at large. During the year, we devolved management and co-ordination of corporate responsibility At the same time, we know people have from a central function to our operating different attitudes to their mobile phone. For businesses in the UK, Germany, Ireland and many it is vital to their work and social lives. the Isle of Man. This sets us on the right path But they may also have concerns about to get closer to our customers and the communications masts and mobile handsets, communities in which we operate. In addition, our effect on the environment and the way our ethical and environmental procurement we behave as a company. Our response is policies, described on page 17, help our to consider our customers’ needs but also suppliers to meet our own standards. their concerns. How we are seen We believe we can do this by a combination Our achievements have been widely recognised of three things: through corporate awards and by the investment community and we are represented • focusing on our customers; in the main sustainability indices and funds. • managing our social, environmental and ethical effects in a careful and In 2004, we were again selected as a member transparent way – in response to feedback of the Dow Jones Sustainability Indexes that from external dialogue; track the financial performance of leading • being a proactive member of society and sustainability-driven companies worldwide. contributing to its wealth and wellbeing. We were top scoring in the wireless communications sector. Our many other index A culture revolving around you inclusions are shown by the logos included on We constantly seek to gain increased the following pages. understanding of our real effect on society. We use the expression “See what you can do” to describe the O2 approach to customers, and the way we encourage people in O2 to understand our effects and to engage with the communities we serve.

www.o2.com/cr/report2005/engaging 7 See what you can do.

HOW CAN I VOICE MY CONCERNS, IDEAS AND COMMENTS?

O2 values everyone’s feedback. This is how you can contact us: Governance and ethics Ethical conduct Risk is inherent in our activities and it is We have created a clear set of Business essential to manage it well. Risk management Principles. Everyone in O2 is required to live by Corporate Responsibility – is a powerful way to identify, measure and them in their work so that we can demonstrate general enquiries: manage uncertain future events that could the highest ethical standards in working with O2 plc threaten our assets, revenue, brand, each other and in the marketplace. reputation or shareholder value. It also helps Corporate Responsibility Employees are encouraged to report any Legal and Corporate Affairs us to identify and seize opportunities to strengthen our business. potential breaches of our Business Principles Slough in confidence and without fear, using a SL1 1YP We have created a framework that links confidential reporting facility, and we keep a UK governance, corporate responsibility and our register of all such reports. A summary of the own business principles – the high ethical register is presented to the Audit Committee standards expected of everyone in the at each of its meetings. Email: [email protected] Company – into one consistent approach. Telephone: +44 (0)113 272 2000 More information about corporate Our Business Principles cover the ethical governance and related issues are included behaviour we expect of everyone on issues such as competing fairly; accepting gifts and Customer care in the 2005 O2 plc Annual Report and Financial Statements. hospitality; delivering good value; health and O2 UK: www.o2.co.uk/help safety; and fair and equal employment. The O2 Germany: Our internal control framework helps us Business Principles also emphasise that we do www.o2online.de/o2/kunden/kundencenter to provide a good service to our customers, not tolerate any harassment in the workplace, O2 Ireland: web.o2.ie/site/contact_o2/index.jsp improve quality continuously and aim for do not make donations to political parties and excellence. We were placed sixth among UK aim to protect the confidentiality of employees companies in a Government league table of and customers. Masts, health & environment the best performers in corporate governance. O2 UK: [email protected] Compliance Telephone: 0113 3886780 We support the Disclosure Guidelines on It is O2’s policy to be fully compliant with its Social Responsibility, laid out by the Association Business Principles and local and regulatory O2 Germany: [email protected] of British Insurers, to make sure we are requirements. During the year, the Board O2 Ireland: managing the significant social, environmental approved a detailed updated compliance Telephone: 1909 (O2 mobile phones) and ethical risks that may affect us. We review policy. Online training and team briefing a Group-wide risk register every month to material is available to ensure that all Child protection or nuisance calls set out and measure the key risks we face, employees are aware of our Business Principles and we have similar registers in each and how they should be applied. We have O2 UK: [email protected] operating business. increased the uptake of our mandatory Telephone: 0870 521400 training in this area and issued a new O2 Germany: [email protected] The Combined Code (Turnbull Section) guides compliance leaflet for our employees. O2 Ireland: our internal control policy and procedures. We We have a network of compliance officers manage social, environmental and ethical risks to monitor the progress of this activity. Telephone: 1909 (O2 mobile phones) by assessing their potential impact, likelihood and our appetite to manage them, and develop Executive Committee members are required to strategies to mitigate them. Controls are confirm compliance with our Business Principles scrutinised as part of a cyclical risk-based audit as part of the Corporate Governance approach overseen by our Audit Committee. Certification process.

The Board is responsible for the success of In 2004/05 we received one complaint from the Company and it provides leadership within Ofcom, the regulation and competition this framework of internal controls. authority for the UK communications

8 www.o2.com/cr/report2005/engaging industries, concerning unfair consumer terms. to our operating businesses and aims to We agreed to clarify and amend some terms ensure that our approach to corporate WHO WE TALK TO and communicated this information to our responsibility is consistent across the customers in April 2005. whole Group.

ICSTIS, the regulatory body for UK’s premium Significant issues, such as environmental rate telecommunications industry, upheld protection, health and safety, and child Environment three complaints and issued a fine against our protection are reported to and discussed by online portal. An external information provider our Executive Committee and the plc Board & Sustainability had breached the regulatory code whilst using at least every six months. Suppliers O2’s premium text platform. As a result O2 Local authorities terminated its contract. In addition, ethical procurement, employment issues and general corporate responsibility The UK Information Commissioner brought updates are reported on quarterly to the Marketplace Membership organisation 11 adverse assessments against our operations Executive Committee and every six months in the UK with claims of failure to comply with to the Board. An Executive Director or senior Workplace the Data Protection Act. manager champions various subject areas and Shareholders reports regularly to the Group Board. Their Employees We aim to comply with voluntary advertising remuneration is linked to our success in standards and guidelines, such as the meeting key performance targets in employee Trade unions/ recommendation by the Stewart Report (2000) engagement and customer satisfaction. We Customers works councils of not marketing directly to children. We also developed a list of specific key performance aim to withdraw any advertising that is found indicators for corporate responsibility last year. Health misleading or inaccurate. In 2004/05 A summary has been included on our website. advertising standards authorities brought two Research complaints against our operations in the UK, The Board has an annual conference to O2 organisations two in Ireland and one in Germany. We aim discuss the vision and strategic direction of Regulators to ensure that every regulatory complaint we the Company as well as receiving updates Industry associations receive is investigated in accordance with our in corporate responsibility issues. Additional Multilateral organisations compliance procedures. training for Board Directors is provided on request. During the year, the Board was Managing performance briefed on a range of issues from community Government O2’s approach to corporate responsibility is investment, health and safety, mast siting and Community co-ordinated by O2’s Corporate Responsibility environmental management, to adult content, Forum (CR Forum). This monthly forum child protection, diversity and general Investors includes representatives from O2’s operating employment affairs. businesses and headquarters. It is chaired by Charitable organisations Richard Poston, Corporate Affairs Director, a Our social, environmental and ethical member of the O2 plc Executive Committee. processes and controls will be reviewed this year by a new third party as part of our risk This newly established CR Forum replaces O2’s management programme. All of O2’s Governance Corporate Responsibility Advisory Council. operating businesses have environmental One of its most important jobs is to make management systems certified to ISO 14001. & ethics sure that the active management of social, In addition, O2 UK and O2 Ireland have a environmental and ethical matters – our health-and-safety management system Campaigning/activist organisations corporate responsibility approach – is part of certified to OHSAS18001. Our products and our daily operations. The CR Forum has also services are registered to ISO9001:2000 been overseeing the transfer of corporate standards. We also use the European responsibility management from headquarters

www.o2.com/cr/report2005/engaging 9 Foundation for Quality Management (EFQM) them so that shareholders can make informed RECOGNITION model to measure ourselves against the best decisions about a company’s direction. performers in Europe. • O2 plc – Association of Chartered Certified Accountants: Sustainability O2 engages with a wide range of Reporting award for ‘Innovative Reporting’ 2005; Understanding opinion communities, such as customers, employees, To be really effective, our management systems pressure groups and regulators. We have • O2 plc – European Strategic Risk Awards 2005 ‘Best Corporate Social need to be responsive to a wide range of developed a method to track how well we Responsibility Programme of the Year’; concerns. That is why we put such a high value identify, manage and mitigate all social, • O2 plc – Charities Aid Foundation ‘Corporates and Communities Award on communication with stakeholders. It allows environmental and ethical issues in response for Online Reporting’ 2004; us to talk, listen and learn from the groups of to input from regular dialogue. This method people who have a direct or indirect interest will be applied starting from 2005/06. • Government league table of the best performers in corporate governance, in O2. It also helps us to shape our policies O2 plc included in the top six; and processes so that we can safeguard The impact of any issue on our business is our reputation and continue to operate in measured against how it would affect our: • O2 plc – Ethical Consumer: Best Corporate Environmental Reporting 2005 – a sustainable way. A summary chart of our • business value; O2 plc included in the top 15; stakeholder groups is included on the • operations; previous page. • O2 Ireland – Chamber of Commerce of Ireland: CSR Awards 2004 citation • reputation. for sustained success in implementing good corporate responsibility practice We engage regularly with a number of across all aspects of O2 Ireland’s activities. At the same time our ability to manage the interest groups. Informal engagement support issue is weighed against three other factors: formal contractual arrangements or agreements, such as those with our suppliers • the quality of our engagement with or trade unions and works councils. We also relevant stakeholders; JUDGES’ QUOTE ON O2’S WINNING ENTRY AT engage proactively with employees to improve • the level of control we have over any issue; THE EUROPEAN STRATEGIC RISK AWARDS 2005 – our workplace, with our customers to ensure • the urgency of an issue or the time it takes BEST CSR PROGRAMME OF THE YEAR increased understanding of their needs, and to manage it. with campaigning organisations to understand “This entry [from O2] showed how the wider social and environmental Each issue or group of issues is then scored the spirit of CSR [corporate social implications of our operations. and plotted on a dashboard, similar to the one we use for assessing other risks. By using responsibility] filters through the whole During the year, a specific method was this new method – which recognises both organisation – an imaginative approach developed to track and map our engagement the views of stakeholders and our ability to with stakeholders and to ensure this could in manage corporate responsibility issues – we directed at the public as well as their future fully support the decision-making of have been able to customise AccountAbility’s own staff, dealing with a broad range the Board and its sub-committees. 5-part materiality test, which we applied as a desk-based research tool for last year’s report. of stakeholders and issues.” Deciding what to report on As a result, we now have a way of mapping We believe a wide range of non-financial corporate responsibility issues for O2 that fits issues affect our business and we try to define within our overall risk management process clearly what these are. and that can be applied through our recently Non-financial risks – including social, acquired online system. environmental and ethical considerations – This system allows us to see how our are treated in the same manner as any other management of key social, environmental matters that may affect the sustainability of and ethical issues is evolving. It is based on our business. Our risk management policy the input we receive from stakeholder helps us to identify, measure, manage and engagement and is tailored to fit alongside mitigate as well as to prioritise any issue that similar systems that track all the risks we face. can pose a potential risk or offer us an opportunity for improved performance. We The initial research findings in developing disclose in our Annual Report and Financial this new method and other stakeholder input, Statements the principal business and such as media reports or opinion leader regulatory risks faced by our operations. research, has helped us to prioritise issues to be included in this Corporate Responsibility This process will help us prepare for the new report. This report is aimed at anyone who UK Operating and Financial Review (OFR) has an interest in our business. We have regime, which becomes a legal reporting also issued operating business reviews on the requirement for us in 2006. The OFR will flipside of this report and on our website for require all companies to publish a broad those who would like to know more about view of the risks and uncertainties facing local activity in their area.

10 www.o2.com/cr/report2005/engaging O2 plc publishes corporate responsibility Company. It said we may not, therefore, reports annually. The previous report was be benefiting as a business in these areas. CHART 1: O2's management of stakeholder issues published in July 2004. This report covers our operations up to 31 March 2005. The report The research recommended that we should: covers O2’s fully owned operating businesses, Cumulative stakeholder involvement • be more active in shaping the excluding joint ventures. stakeholder agenda; Local International Media Opinion-formers Regulators activists NGOs The report is structured around the Global • put more resources into dealing with Reporting Initiative indicators as well as around ‘fringe issues’; Consolidation Health the Business in the Community reporting • set up engagement strategies for Corporate Governance framework. Both reporting frameworks are specific issues; • establish stakeholder advisory panels Children referred to at the beginning of each chapter Business model and a detailed GRI reference table is available for contentious matters. integrity Crime on our website. The majority of our report is The research also suggested this approach reviewed by our assurance providers Ernst & would help us to get input from stakeholders Risk management Young LLP and the Involving-community that would help us develop future products section has undergone a detailed review and Environmental impacts and services. assessment of our community investment Consumer protection activity by our second assurance providers – In response, we are hoping to start collecting The Corporate Citizenship Company. information generated through stakeholder dialogue using our online risk management Lifestyle impacts www.o2.com/cr/report2005/gri tool. This system would potentially allow us Workplace impacts Our Corporate Responsibility website, which to automatically track the issues – that most concern stakeholders – so that we stay up to Socio-economic impacts will include our detailed approach as well as Privacy the full text of this Report, is available at speed with their worries as they evolve. Zone of influence www.o2.com/cr/report2005. This first step should allow us to address Public exposure and awareness Public exposure Fringe Emergence Expansion Escalation Embedding Managing issues in future the other recommendations arising from our stakeholder engagement research. Chart 1 on this page interprets how we Time Chart generated by SustainAbility manage some current issues we face. Our strategic objectives It was developed as part of the research In May 2004 our Board approved a set of that preceded the development of our new key corporate responsibility objectives for O2. To help us map the evolution of how we are dealing with method for dealing with stakeholder input In brief, they were: various social, environmental and ethical issues we have and corporate responsibility risks. The grouped them under a number of headings. As an example background material used for the chart was • to make employees proud to be working we have included the definitions of three of the areas here: based on a detailed review of stakeholder for O2 – whilst observing the highest levels documentation that we had generated of ethical business conduct; • Business Model Integrity: Anti-competitive behaviour; through media reviews, research of British • to achieve continuous, measurable Corporate tax; Subsidies; UK/EU Regulation; Universal public opinion, international feedback reports, improvements in our operations in all areas service obligations and dialogue with customers, MPs and that affect our customers, the physical O2 employees. environment and society; • Lifestyle impacts: Adult content; Gambling; Responsible • to be proactive in developing exciting use of mobile technology The research concluded that O2 has an mobile services that contribute to wellbeing “enormous amount of expertise in stakeholder • Socio-economic Impacts: Digital inclusion (inter- and safety in society. engagement and has evolved a wide-ranging generational, disability, diversity); Real estate price impacts approach in the relatively short time that the One year on, we believe our decision to due to masts; Sponsorship; Labour issues in the supply chain. Company has been operating... that has devolve responsibility for the day-to-day ensured that it has been alert and responsive management of corporate responsibility to to a rapidly evolving environment”. our operating businesses has paid off. Each business has taken on the challenge of these The report highlighted the fact that when objectives and achieved a number of it comes to high-profile risks – such as the milestones, as can be seen from the examples perceived health risk of mobile phones and included in the Summary of key events section communications networks/masts – we manage of this report. These three objectives continue these well, supported by dedicated teams. to direct our activities under the umbrella of But it suggested that stakeholder engagement corporate responsibility. on ‘fringe’ issues tended to be more ad hoc and managed by a handful of people in the

www.o2.com/cr/report2005/engaging 11 From childhood to adulthood, in towns and in villages, at home and at work, the mobile phone contributes to the lifestyle, convenience and safety of at least 1.5 billion individuals worldwide.

12 www.o2.com/cr/report2005/accessing Accessing

IN THE MARKETPLACE

O2 is a wireless communications company – We engage a range of groups in dialogue – BITC AND GRI REFERENCES but we are really all about people. The from child safety organisations and charities, MARKETPLACE mobile phone contributes to the lifestyle, to disability groups, governments, regulators, 2.9, 2.22, 3.9, 3.10, 3.11, 3.12, convenience and safety of at least 1.5 billion the police and consumer associations. We 3.14, 3.15, 3.16, 3.17, 3.19, EC4, individuals worldwide. believe that by being well informed ourselves, we can more effectively inform others and EC13, HR1, HR2, HR3, HR7, PA1, We believe mobile services play a positive and provide products and services that meet the PA5, PR6 and PR8 useful role in society – and we want people true needs of our customers. from all walks of life to enjoy the benefits they offer. We do this by helping our customers Appropriate mobile services keep in touch, making their lives easier and The growth of content-rich multimedia safer, engaging their imaginations and services is changing the way we communicate, providing better experiences through our with enhancements like colour screens, products, services and know-how. video streaming, picture messaging, internet browsing and TV viewing. Our products and the way they are used can pose some social challenges, however. However, the new generation of mobile These include: communications also has the potential to distribute material that is inappropriate for • safeguarding vulnerable users some audiences, such as pornographic or and customers; violent images, video and games, gambling • providing products and services to meet and betting services. the needs of disabled or excluded people; • ensuring customer satisfaction and loyalty; We do not wish to play the role of moral • balancing customers’ privacy with arbiter and we respect our customers’ public protection; freedom to decide how they use their mobile • ensuring we operate ethically and fairly. phone and the content they access through our network. However, we want to safeguard vulnerable people – especially children – and prevent the distribution of malicious, inappropriate or illegal content.

We want to safeguard vulnerable people – especially children – and prevent the distribution of malicious, inappropriate or illegal content.

www.o2.com/cr/report2005/accessing 13 EXTERNAL DIALOGUE: EXTRACT FROM A CALL TO Content standards and responsibly. Research shows that one OUR NUISANCE CALL BUREAU (NCB) We do not publish 18-classification content million children under the age of ten already services under our own brand, but we allow own and use a mobile phone, representing commercial partners to bring these to one in every three children between the ages O2 NCB: Good afternoon. My name is Pat. appropriate and consenting audiences. We of five and nine. Ownership among 10 to 14 How can I help you? insist that our commercial partners ensure that year olds tops 40 per cent and, across Europe, these services are only available to customers the youth market accounts for well in excess Customer: Someone keeps ringing my daughter who have first proved that they are 18 or older. of 100 million mobile phones1. and swearing down the phone. It is very In the UK, O2 was the first mobile operator The protection of minors and the vulnerable worrying. We don’t know what to do. We have to join the Internet Watch Foundation (IWF) is an important part of what we do. the number calling her. It is xxxxxxxxx. and is a member of its Funding Council. The IWF investigates internet sites that contain We promote awareness by raising the issues O2 NCB: I can arrange to change her number. potentially illegal content, primarily child in our industry and by engaging with charities, Alternatively, you can report this to the police pornography. All illegal material is passed child safety campaigners, governments, law enforcement agencies, regulators, content who can request information on the number to the police via the National Criminal Intelligence Service in the UK. producers and parental groups. We have calling and consider prosecuting the offender. helped to develop industry codes of practice O2 Ireland is affiliated to the country’s in the UK, Ireland and Germany. Customer: I think I will change her number. ‘Hotline’ service, operated by the Internet My daughter is dyslexic. Can you find a good Service Providers Association of Ireland and In the UK, the code of practice for the self- number for her, one she can remember? supervised by the Government’s Internet regulation of new forms of content on Advisory Board. The primary goal of the mobiles became effective in January 2005. O2 NCB: We will try our best for you, certainly. Hotline is to combat child pornography. This covers audio visual content, mobile games, chat services and internet access. Feedback from stakeholders suggests that the In 2004/05, O2 introduced age-verification The call was taken by P. Bodle, Nuisance Call Bureau, O2 UK issue of privacy may also become a subject of future concern. We believe the introduction processes in O2’s stores and online, and of location-based services – which can identify parental control tools to restrict internet the location of a mobile phone user – could browsing. Some types of calls, such as be misused and infringe people’s rights and international and premium rate calls can be safety. We support the new UK Code of barred on request, as can premium-rate adult Practice on Location Based Services, developed services. Where services are classified as 18, See what you can do. by peer operators and service providers in access must be restricted. consultation with the Home Office and In Germany we helped to develop ‘Polly and children’s charities. The Code stipulates that Fred’, an interactive programme, used in the mobile customers cannot be tracked without IF YOU DO RECEIVE A NUISANCE CALL German curriculum to help schoolchildren use their explicit consent. mobiles safely, at low cost and responsibly. • Keep calm. • Don’t give out your mobile number if asked. O2 UK has also participated in an industry In the UK we undertake school visits and we • Let callers identify themselves first, if their number is not initiative to develop a common STOP request continued to support Milly’s Fund, which displayed on your mobile. for premium rate text services. This will help • Be careful not to leave your name or contact number on promotes text messaging as a way for parents to reduce the receipt of unsolicited texts, your mailbox greeting. and children to keep in touch. • If the phone rings again, don’t say anything when you commonly referred to as spam. During the last answer it. two years we have also promoted debate O2 Ireland does not offer adult content or chat • Don’t talk to malicious callers. around the issue of privacy by jointly hosting services. The Irish Cellular Industry Association • Remember malicious callers use the phone to hide behind, a seminar on the subject of privacy with think- (ICIA) is testing filtering software to prevent because most would be too frightened to say the same tank Demos. things to your face. the transfer of inappropriate camera phone images and access to offensive websites. As Protecting young people What can you do? a member of ICIA, O2 Ireland suggested that O2 is committed to offering appropriate • Dial 100 from your O2 mobile (O2 UK only). trials are done at an industry level via the ICIA content and web-enabled services to its • Contact your Service Provider if you have a Pay Monthly rather than by an individual mobile operator. mobile, or the Nuisance Call Bureau that can also be customers. We do not market phones to Results are due during 2005. contacted directly by email at: [email protected]. under-16s and, when parents buy mobile • If you have a Pay & Go mobile you should either contact handsets for their children, we encourage the Police to report that a crime has been committed or O2 was instrumental in compiling the Irish them to monitor usage carefully. customer service who will pass your details to the Nuisance cellular industry’s Code of Practice, which Call Bureau if further help is needed. provides for the responsible and secure use of Many parents value the benefits that a mobile mobile services. The Code establishes phone can offer their children, but they also If you receive text ‘spam’ or ‘scam’ messages standards on issues such as parental controls, • Forward them to short code 7726 (O2 UK only). want to be sure they are used appropriately inappropriate or offensive communications, • The Nuisance Call Bureau will investigate it for you.

1Research carried out by MobileYouth in 2005 14 www.o2.com/cr/report2005/accessing premium-rate services, internet access and O2 can review usage and contact customers user education. if we notice call patterns which are not typical, THE MOBILE SERVICES INDUSTRY… or appear to be excessive. In cases where we In all our markets we have published, or plan are unable to contact the customer to confirm Employs approximately to publish, child-protection guidance, giving call activity, we can impose a bar which only parents and guardians practical help on issues ... 2.8 million people across the EU (including allows the customer to receive calls. If a call is 1 such as handset theft, bullying, the safe use of made from the handset, the call is re-routed indirect jobs generated) 2 camera phones and public forums, also called to O2 Customer Services which allows us to ... 200,000 in the UK alone chat rooms. confirm recent call activity with the customer. We also offer advice on our website to O2 UK and O2 Germany, who operate public Contributed customers wishing to bar any premium text 1 forums, are moderated to help identify ... £72.0 billion of EU GDP adult and chat services as well as guidance inappropriate, threatening or bullying 2 on how to stop subscription-based premium ... 2.2% of UK GDP exchanges with children and we undertake to messaging services. alert the relevant agencies to any complaints. Generated In the UK, we have also been tackling bulk During 2004, O2 Ireland helped connect 1 and nuisance calls through our dedicated ... £57.0 billion per year in revenues for EU Governments people in remote areas to wireless broadband 2 Nuisance Call Bureau. We are also actively services, and in the Isle of Man we are ... £10.0 billion went to UK government finances involved with national authorities to tackle modifying street junction boxes to extend fraud over our networks. fixed-line broadband coverage which is now The average industry employee contributed available to around 99 per cent of homes. 2 Gambling ... £116,000 in revenue in the UK In all our markets we offer a variety of In time we expect more and more customers mobile tariffs to suit our customers’ needs 1 will use their mobiles to access gambling Research by Ovum in 2004 of the 15 EU Member States before expansion. and lifestyles. 2 services. We respect the rights of our ‘The Changing Economic Impact of Mobile Phones (2004)’ research report by the Centre for Economic and Business Research (CEBR) on behalf of O2. customers to choose whether to use such During the year, we unveiled exclusive plans services but we are committed to ensuring to launch the i-mode® mobile internet service, that children and the vulnerable are protected. in the UK and Ireland in 2005. In Germany we In line with our commitments under the UK will launch a mobile internet service with the Code of Practice on new forms of content – same functionality under a different brand. In Ireland we launched a ‘talking’ mobile published by the mobile operators in January In both cases we are working with specialists phone in 2004, developed through our 2004 – O2 requires commercial partners from NTT DoCoMo to bring this easy-to-use relationship with The National Council for the offering gambling services to ensure that their product with its breadth of tailored internet Blind. This converts text messages to voice. services are only available to customers who content to market. have proved that they are 18 or over. We are encouraged by the experiences of We examine ways making our services more the more mature mobile markets in Korea Inclusive services inclusive, particularly to those with special and Japan and by youth research into mobile By 2007 there are likely to be as many needs. We have taken part in the UK applications in the UK which suggest that, mobile phones in Western Europe as there Government’s Digital Inclusive Panel and increasingly, the mobile phone is becoming a are people. We believe it is important that helped launch the UK Digital Strategy. We powerful, spontaneous and inclusive learning mobile services are accessible to all types of now comply with the General Code 15 and tool for young people. customers, regardless of cost, special needs, the Code of Practice for Service Delivery for age, knowledge and geography. the Disabled and Elderly in the UK and we For example, in time for May 2005 UK belong to the Employers Forum for the General Election we launched a special site on Consumer differences create what is often Disabled and the Two Ticks scheme, which our O2 Active WAP portal to tell customers, referred to as the ‘digital divide’ and we try to raises disability awareness among employers. especially first-time voters, how to find their address each one to make sure as many polling station or check to see if they were people as possible can benefit from mobile We already make special provisions – like registered to vote. communications. invoicing in Braille, larger text size, audio options and by providing a fully accessible During the year, we also began to address For example, we offer pre-pay packages in website, O Access, for people with visual the potential problems associated with new each of our markets. This service enables 2 impairment. But we want to do more. mobile data services, such as bulk unsolicited customers to control the cost of using a mobile messages, also known as spam. without committing to a contract or post-pay While we have moved with the trend towards deal. In total, almost 60 per cent of our more sophisticated handsets, we are aware, Customer focus subscriber base elect to use pre-pay services. too, that simple phone designs may help Delivering the best customer experience certain customers, particularly elderly ones. is at the heart of everything we do and In the UK and Germany we have introduced a The vibrate mode of mobile text messaging customer satisfaction scores are seen as service that is available at lower cost in chosen is also a simple but effective function for a key measure of our success. locations – usually close to a customer’s home the hard of hearing. or business. We believe this service will make our services accessible to more people.

www.o2.com/cr/report2005/accessing 15 We want to improve our performance O2 applies checks to bills and the processes DR. IRWIN S CHEN, VICE PRESIDENT AND continuously. We research the effectiveness are regularly audited by an independent third GENERAL MANAGER NETWORKING AND of our communication, the public’s perception party and overseen by the industry regulator. COMMUNICATIONS BG, BENQ CORPORATION of our brand, the service levels of our shops, O2’s billing accuracy is within industry online portal and customer care units, standards and we have an approval under “ With the co-operation of leading operators customer satisfaction in our products and the regulator’s monitoring scheme. The British like O2, we also recognise the importance services, and the quality of our network. Approvals Board for Telecommunications of understanding and influencing labour From October 2004 to March 2005, O2 UK (BABT) has renewed O2’s accreditation. conditions in the supply chain and labour had the best call success rate of all UK operators. We believe this is a clear and New services management, and we have now established independent indicator that enhanced Following our successful joint venture in the our own Ethical Policy that will encourage customer focus is improving our performance. UK with Tesco, Tesco Mobile, we announced positive supply chain labour practices. a similar joint venture in Germany with Tchibo. This will continue to be our company The biggest challenge for our industry is to persuade customers not to migrate from This allows pre-pay customers to call both policy for the welfare of the society one network provider to another. In common landlines and all mobile networks for a flat- and human beings.” € with all operators, we face this problem of rate of 0.35 per minute at any time, day or ‘churn’. For this reason, we focus our strategy night. In the UK we introduced free calls for on the whole customer experience and work O2 contract customers, making helplines O2’S RESPONSE: to build customer loyalty. such as Childline, the Bullying Line and Crimestoppers free. We continue to develop a culture of In 2004/05 we carried out our first ethical ‘customer-centricity’ and we support this with Our high-speed 3G network was launched in supplier audits. The response from suppliers Group-wide training and development. During Germany during 2004 and in the UK in early such as BenQ has been encouraging and 2005. In partnership with NTL Broadcast and the year, our customer base grew by 16 per we aim to increase our activity in this area cent to 24 million and about 34 per cent of Nokia, O2 has begun TV trials in the Oxford our customer base are now using non-text area using the DVB-H broadcast transmission to include a greater number of suppliers in mobile data services. standard – specially designed for handheld our audit activity. reception, low battery power consumption O2 UK launched the 30-day Challenge to and robust reception. Our aim is to study how encourage employees to think about initiatives people choose to access TV shows, music that can improve our business. Among the videos, news and sport while on the move. resulting ideas, we now offer customers replacement products rather than cash on Pre-pay registration returned goods. There have been some calls for registering all Free customer calls (number) through new mobile phone users. We have expressed In the UK, we have announced plans to open our reservations to government on the O2 UK’s network to community helplines more O2 stores. We are also introducing a proposed introduction of a national 3G (April 04-April 05): more attractive range of services, better handset registration scheme. support, pricing deals and new ways to Childline 68,447 reward customer loyalty. One of these is to We believe that a mandatory registration give back our Pay & Go® customers 10 per requirement would be a barrier to social Crimestoppers 12,445 cent of their spend on topping up their inclusion of mobile communications more- phones every three months. over, in the absence of a national identity card The Line 191 system and with the number of operational Not all our initiatives go to plan, so we try to issues associated with such a scheme, it may Priority Line 352 move quickly to correct any mistakes. During fail to address the root causes of the problem. the year, we experienced a teething problem Bullying Line 686 with a large IT project to consolidate nine Although uneasy about compulsory billing platforms onto one O2 system. A small registration, we believe it is right to support Get Connected 1,222 number of customers, less than one per cent measures designed to protect the public. of the UK base, were affected by the problem In the UK we already encourage voluntary in which they were not billed for some calls. registration. Ireland already has one of the highest levels of voluntary registration We quickly resolved the problem and, as a in Europe. goodwill gesture, gave affected customers a 25 per cent discount on their next bill. In the UK we also launched several projects, including instant call back to customers with queries to help improve efficiency.

16 www.o2.com/cr/report2005/accessing Competition, regulation and complete. The Group had 35 days’ handset and network manufacturers in South- economic impact (2004: 34 days’) purchases outstanding at East Asia and Eastern Europe. As a direct The price of mobile services and the complexity 31 March 2005, based on the average daily result of these visits, one of the companies of tariffs remain a cause of concern in some amount invoiced by suppliers during the year. has since developed their own ethical places. The European Commission is procurement policy. continuing to investigate mobile operators’ We want our products and services to be international roaming charges. desirable and competitively priced. We aim Although we want to make sure high to award business solely on merit, without standards apply as far down our supply chain We co-operate with regulators openly and do favouritism, and look to secure products and as possible, we rarely have the resources to our best to deal with any issues they raise. To services at the best available terms. Ethical and carry out checks beyond the first tier of ensure that customers can compare our tariffs environmental standards are an important suppliers. We encourage our principal with those of other operators we publish our part of this equation. suppliers to spread best practice to the prices and tariffs both online and in our shops. companies they buy from. Simpler pricing and clear and cheaper roaming In 2003/04 we set out to devise procurement tariffs are also the aim of those operators who policies that would help us engage with our Our approach is to engage with suppliers to have joined us in the Starmap® Alliance of suppliers to take into account the social and improve their practices and to meet recognised European operators. environmental impacts of their operations. standards. In October 2004 we were short- We have developed ethical and environmental listed in the category ‘Best Contribution to The regulator in Ireland found O2 Ireland to procurement policies which clearly express CSR’ in the Chartered Institute of Purchasing jointly dominate the market with another what we expect of our direct suppliers and and Supplier Annual Awards, which recognises operator. Since the finding was made, a third of companies further down the supply chain. best practice and innovation in procurement. operator has increased its market share to These policies, including labour practices and In the coming year we plan to further increase around nine per cent and we believe that environmental protection, are communicated the awareness within our procurement teams. another operator is due to launch. Hence, we on a procurement website www.o2.com/cr. We also intend to carry out further supplier believe that the competitive dynamics of the In all of our contracts we aim to refer directly audits of our main suppliers. Irish market will continue to change significantly. to O2’s Business Principles. Industry co-operation on ethical Research commissioned by O2 suggests that Our ethical procurement policy is based on supply chain issues our industry will continue to create wealth and the Ethical Trading Initiative Base Code, the GeSI, the Global e-Sustainability Initiative, employment in its markets. The mobile phone standards of the United Nations Universal is a joint initiative by the United Nations sector’s contribution to UK GDP and government Declaration of Human Rights and the Environmental Programme (UNEP), the finances are set to more than double over the International Labour Organisation International Telecommunications Union (ITU) next 10 years. The research predicts that the conventions. We look for assurance that and the information and communications sector will be an important source of further suppliers are not relying on forced labour, industry. GeSI aims to address social, employment, with around 56,000 new jobs do not use child workers, pay living wages, environmental and ethical issues within being created in the market by 2013. offer acceptable working hours and safe the sector. O2 co-chairs its supply chain and healthy working conditions, using no working group. Ethical procurement harsh or inhumane practices. O2 operates its networks in Western Europe In 2005 the group hosted a stakeholder forum and has its headquarters in the UK. Our supply We use the ISO 14001 Environmental of non-governmental organisations, investors chain involves big and small companies from Standard to benchmark the environmental and industry representatives to help guide across the world. We spend more than performance of our suppliers. work towards achieving a common framework £2.2 billion each year to procure the products for managing ethical supply chain issues. and services we need – from network Both for our ethical and environmental Our active involvement in GeSI is key to our equipment, mobile phones and software procurement policies, we have developed ethical procurement approach. By working to office stationery and professional and self-assessment questionnaires to understand with others in the industry there is greater contracting services. the potential ethical risks in our suppliers’ opportunity to improve our supply chains operations. In 2004/05 we issued self- and to establish a common approach to Unless negotiated otherwise, we aim to pay assessment questionnaires to more than 20 supplier assessments and auditing. our creditors promptly within 30 working days of our key suppliers. We also carried out five of the invoice date, if the invoice is timely and ethical audits of our existing and potential

We look for assurance that suppliers are not relying on forced labour, do not use child workers, pay living wages, offer acceptable working hours and safe and healthy working conditions, using no inhumane practices.

www.o2.com/cr/report2005/accessing 17 There is much public debate about whether mobile phones, base stations and antennas cause adverse health effects – and we aim to provide the best information available today.

18 www.o2.com/cr/report2005/protecting Protecting

OPERATING RESPONSIBLY

There is much public debate about whether We take the concerns of our customers, GRI REFERENCES mobile phones, base stations and antennas employees and other stakeholders seriously, 2.9, 2.22, 3.10, 3.12, 3.13, 3.14, cause adverse health effects – and we aim to so we include the perception of an alleged 3.15, 3.19, IO3, IO4, IO5, IO6, IO7, provide the best information available today. health risk from mobile communications in IO8, PA8, PA9, PR1, PR2, PR5, PR6, our consolidated Group risk register. Our information leaflets are available in our PR8, SO1 and TA4 stores and online and include information on: The issue centres on whether exposure to radio frequency waves emitted from mobile • radio frequency (RF) from mobile phones and antennas causes adverse health phone masts; effects. Our approach is to ensure we operate • mobile handset Specific Absorption Rates within the exposure guidelines. We also (SARs); comply with best practice guidelines on • repetitive strain injury (RSI); responsible mast siting, openly consult with • safe use of mobile services, such as the communities where our networks are when driving. built and provide information materials.

www.o2.com/cr/report2005/downloads In 2004/05, there were no complaints from regulatory or other official bodies that Scientists have been studying the health oversee our compliance with precautionary effects of radio waves – used by many familiar emission guidelines. technologies, such as TV and radio transmitters and cordless phones – for over 50 years. Exposure to radio frequency (RF) waves So far, researchers have established that the We take care to ensure that the effect of only adverse effect from radio waves emitted our products, services and networks does by mobile communications is heating. not exceed international RF exposure limits. Exposure guidelines, based on analysis of all relevant science, protect against this and All our products comply with international incorporate precautionary margins. exposure guidelines and our network equipment is operated to ensure people The scientific consensus remains that mobile are not inadvertently exposed above these communication masts and mobile phones guidelines. This includes the terrestrial trunked do not pose a threat to human health. For radio (TETRA) technology used by Airwave. instance, the Stewart report of 2000 states that ‘the balance of evidence does not suggest We adhere to the exposure guidelines mobile phone technologies put the health of issued by the UK’s National Radiological the general population of the UK at risk’. The Protection Board (NRPB), Germany’s National Radiological Protection Board (NRPB – Strahlenschutzkommission (SSK), the now part of the Health Protection Agency) International Commission on Non-Ionizing confirms in its report of January 2005 that ‘the Radiation Protection (ICNIRP) and the main conclusions of Stewart still apply today’. European Commission. Both studies call for further independent research into any areas of uncertainty. We support this precautionary approach.

www.o2.com/cr/report2005/protecting 19 Independent research We currently abide by a number of COMMENT FROM COUNCILLOR SUSIE KEMP, We do not conduct or commission our own Government and voluntary commitments. CHAIR OF LGA PLANNING COMMITTEE: research on exposure to radio frequency. They include publicising SAR values for phones Instead, we monitor national and international and an agreement that we do not market our “I think it is great that O2 are taking studies and help to fund the main products to the under 16s. the sustainability agenda seriously and independent research programmes. All handsets we sell, including TETRA look forward to seeing more tangible We agree with our industry peers and experts handsets, conform to the relevant SAR limit evidence over the next 12 months of how that clear scientific evidence can only come of 2 watts per kilogramme. Details for specific they have achieved real sustainability.” from a wide-ranging body of study. We will models of mobile phones are available in our continue to support major independent studies UK stores and online. with clearly stated and relevant objectives. www.mmfai.org | www.izmf.de | O2’S RESPONSE: Our financial commitment last year exceeded www.o2online.de | www.de.o2.com £700,000 and in total it is well in excess of When considering where to locate new £1 million. We communicate with the It is often suggested that selecting a handset radio base stations, O2 always seeks to Department of Health and the Department of with a lower SAR is the best way to reduce minimise the impact on the environment exposure. For those who have concerns about Trade and Industry in the UK, Bundesamt für whilst at the same time keeping the local Strahlenschutz (Federal Radiation Protection exposure to radio frequency waves we suggest Agency) in Germany, and a range of world that moving the phone away from the body authority and community fully informed trade bodies, health authorities and the can be more effective, for example by using a of its intentions. World Health Organisation to ensure that hands-free kit, loudspeaker or texting function. the research addresses appropriate SAR information appears in the user guides health concerns. of all of our products. A press critique and a We expect significant research findings to BBC television report suggested that we were be presented in the next two years. not offering customers enough information Current research includes studies within: about SARs. We responded to this by aiming to include SAR values for each handset in our UK • the UK Mobile Telecommunications Health sales booklet and by providing new customer Research (MTHR) programme of 29 studies, advice material to our store employees. a £7.36 million joint Government/Industry funded independent programme over We have also helped the industry to six years; formulate a policy on ways to minimise See what you can do. • a UK Home Office study into TETRA, the the risk of Repetitive Strain Injury from the technology used by Airwave, our secure hand movements in text messaging. network for the emergency services, Masts and network build AVOIDING REPETITIVE STRAIN INJURY including assessment of the Specific O2 is guided by and fully supports best practice Absorption Rates (SAR) to the head; in the development of its mobile networks and • the joint funded German Government/ When using a mobile phone for texting we aim to be transparent in our network industry research programme – Deutches or playing games: building plans. In total, our networks include Mobilfunk Forschungsgemeinschaft; 25,548 base stations. Wherever possible we • Do not grip the phone tightly. • findings from the ‘Interphone’ research into aim to share sites with other operators. • Press the buttons lightly. the long-term use of mobile phones and • Make use of the special features in the handset whether there is any link to head and neck Our approach – particularly in the current which minimise the number of buttons that tumours. In 2006, we anticipate the results development of 3G services in the UK, of the analysis by the International Agency Germany and Ireland, and Airwave – have to be pressed, such as message templates for Research on Cancer (IARC); is to encourage dialogue and consultation and predictive text. • the World Health Organisation is expected with stakeholders. • Take lots of breaks to stretch and relax. to publish a health risk assessment on RF in 2007. We support the GSM Europe (GSME) However, if symptoms such as persistent or recurring discomfort, recommendations on best practice, the UK pain, throbbing, aching, tingling, numbness, burning sensation, O2 has agreed to help fund a second five-year industry’s Ten Commitments to best siting stiffness are experienced, do not ignore these warning signs and phase of the UK MTHR research programme. practice, the code of best practice on mobile promptly see a qualified health professional. network development, and the joint operator Handsets voluntary agreement in Germany. These require As the MTHR programme publishes research improved communication and consultation, results, we expect a growing interest in compliance with exposure guidelines and handset SAR – a measure of the amount of increased site sharing where feasible. radio wave energy absorbed by the body during mobile phone use.

20 www.o2.com/cr/report2005/protecting CHART 1: Number of O2 Base stations in service (estimate) CHART 2: Number of queries to O2 UK on the sitings of communications masts 2004/05

UK (including Airwave) 12,811 Site Objection (pre-build) 532 45% Germany 11,061 Site Objection (post-build) 261 22% Ireland 1,644 Land Offer 179 15% Isle of Man 32 Query (non complaint) 112 10% Total 25,548 Site Objection (health and 90 8% safety and environmental)

Our performance in meeting the Ten Some of O2 UK’s ground based masts are In 2004, we took a lead role in two health Commitments has been independently capable of hosting equipment from other seminars, jointly organised by GSME, the reviewed by Deloitte & Touche, on behalf of the operators, but not all of these masts will meet European Commission and the Mobile Mobile Operators’ Association, which published the coverage requirements of other operators’ Manufacturers’ Forum. Consumers, regulators, its second review during the year. The report networks. Sharing a mast means increasing industry bodies, activists and European MPs concluded that the industry as a whole is the height and size of the mast and this is attended the events. A third seminar is being improving its performance but that it could not always acceptable to local communities organised to take place in September 2005. do better still. In response we have introduced or local planning authorities, who sometimes The theme will be risk communication and improvements to our record keeping in the prefer several smaller masts rather than one stakeholder dialogue. UK and are currently examining where we larger mast. can consult local communities better. UK: www.mobilemastinfo.com Driver distraction Ireland: www.comreg.ie/sector. We have reported on and contributed to the Our performance in meeting the joint operator issue of distraction driving in the last two voluntary agreement in Germany was Industry co-operation years and were involved in consulting with the reviewed for the third time by Deutsche We participate in and co-fund a number UK Government on the legislation which now Institut für Urbanistik (German Institute of of industry groups, including the Mobile bans the use of hand-held mobile devices Urban Affairs). Operators Association in the UK, the whilst driving. We believe this issue will soon Informationszentrum Mobilfunk e.V. (IZMF) become public again. Some experts now In the UK, we experienced an increase in in Germany and the GSM Europe (GSME). believe that it is the actual content of a objections to new builds. This stemmed partly conversation that is most likely to distract from our increased activities with 3G network O2 chairs the GSME Health and Environment a driver and put safety at risk. building and partly, we believe, from the Working Group, the UK Mobile Operators readily available information we produce for Association Compliance Working Group, Health monitoring through mobile the public. and is a member of the board of communications Informationszentrum Mobilfunk e.V. (IZMF) We are funding the development of We have a dedicated team of community in Germany. medical devices using mobile communications relations managers in each of our businesses to monitor asthma and cystic fibrosis and their job is to engage with local We have a formal agreement to share 3G patients remotely. communities on our network building, especially networks with T-Mobile in Germany and a if there is local opposition to a mast structure. general policy to share masts with all other Trials with asthma patients have already We attend public meetings, consult through operators and to use existing infrastructure proved that many more patients monitored drop-in sessions, distribute information leaflets where possible. their breathing regularly this way compared and, in the UK, operate a dedicated helpline with conventional methods. The cystic fibrosis for enquiries – telephone 0113 388 6780. Informed debate trial is under way and results will be available Our leaflets now include information on at the end of 2005. We are also working We provide local planning authorities with health, child protection, customer safety with the British Lung Foundation which has a list of all the UK sites we plan to develop and safe driving. We are committed to commissioned a study to explore the attitudes in any coming year. This helps them to work encouraging further debate on these issues. of medical professionals and patients to with our community teams and to address the benefits of mobile communications to We do not always get this right. During the potential concerns. remote asthma monitoring. These results year we were made aware of some criticism are due in 2006. Mast sharing regarding the availability of Department of In line with UK Government policy, it is our Health leaflets in our UK stores. So we standard practice when searching for a site for improved our stocks of leaflets and included a new base station, to see whether we can use this measure in our regular internal store an existing mast or structure. We also allow audits. At the same time, we produced other operators to install their equipment on new O2 health and safety leaflets, which our ground based masts, where possible. can be viewed at: www.o2.com/cr/report2005/downloads.

www.o2.com/cr/report2005/protecting 21 At O2 our activities focus increasingly on sustainable development – achieving a responsible balance between economic, social and environmental considerations. We know that this is what many of our employees, customers and other stakeholders want us to do.

22 www.o2.com/cr/report2005/sustaining Sustaining

CARING FOR THE ENVIRONMENT

At O2 our activities focus on sustainable Our environmental impact BITC AND GRI REFERENCES development – achieving a responsible We have identified the main ways our ENVIRONMENT balance between economic, social and business affects the environment, and have 2.9, 2.16, 2.19, 2.22, 3.6, 3.7, 3.12, environmental considerations. We know put an environmental policy in place, 3.14, 3.15, 3.16, 3.17, 3.19, 3.20, that this is what many of our employees, supported by the Board, to mitigate them. customers and other stakeholders want The key issues are: EN1, EN2, EN3, EN4, EN5, EN8, EN9, us to do. EN11, EN13, EN14, EN15, EN16, • energy consumption and the associated EN17, EN19, EN33, EN34 and TA1 People are concerned about the world’s greenhouse-gas emissions that come energy resources, habitats, water reserves from running our networks, our buildings and ecological systems and expect companies and transport; like O2 to find ways to meet the needs of the • disposal of redundant handsets; present without compromising the future. • waste management of our offices, This involves taking the long-term view and shops and networks; assessing how operations can be maintained • engaging with our supply chains; and developed for the future with minimal • reducing ozone-depleting substances environmental impact. used in our offices and by our networks; • controlling the risk of local pollution Energy is at the heart of sustainable from storage of fuel oil. development and we will continue to develop policies with effective energy management We manage these effects with care, aiming as a key objective. Our objectives have been to continually improve our performance using aligned with the European Commission measurable targets that help us check we Environment Action Programme, ‘Our Future are making progress. Our targets specifically Our Choice’, an initiative to tackle climate address greener ways of working and we change, protect nature and wildlife and to undertake projects that align with the aims preserve natural resources. of the Kyoto Protocol to minimise energy use and reduce the effects of global warming. We work in partnership with several organisations to preserve and create bio- Our Group environmental targets are diverse habitats, including Rainforest Concern, externally reviewed by BSI as part of our Future Forests and the Tree Council of Ireland. ISO 14001 continuing assessment programme. In 2004/05, each of our businesses achieved A MORI poll among 2,000 British consumers registration to the international environmental in 2004 asked which areas of corporate management standard ISO 14001. responsibility were most important for the wireless communications sector. Respondents O2’s Group Environmental Forum reports every put the protection of the environment at the six months to the Board through the Group top of their list. We want our environmental environmental champion, Peter Richardson, performance to be seen as intrinsic to the Managing Director of Airwave.

O2 brand.

www.o2.com/cr/report2005/sustaining 23 NICOLA PHILLIPS, ENVIRONMENT CHART 1: Recovered materials from handset recycling in 2004/05 (kg) MANAGER, DHL “DHL, a key supplier of distribution Al Aluminium Cd Cadmium Co Cobalt Au Gold services for O2, is working with 92.08kg 5.68kg 9.95kg 0.14kg the O2 environmental management team to address the Li Lithium Mn Manganese Ag Silver Stainless steel key challenge of climate change. 0.81kg 1.42kg 1.24kg 4.73kg This is the start of a significant initiative to integrate Zn Zinc Cu Copper Pd Palladium environmental responsibility into 1.42kg 512.47kg 0.08kg the overall relationship between the two companies. DHL will also be working with O2 to share best practice findings from its own environment programme which runs across its express, freight We encourage our suppliers to achieve high We collect redundant handsets and and logistics divisions.” standards through the implementation of our accessories through our retail shops, offices, ethical and environmental procurement policies. and by post. We also include recycling envelopes in the packaging of phones sold Managing waste through our online outlets. Returned items are We have a number of important waste refurbished for re-use or recycled, leaving only management challenges, such as dealing a small quantity of inert plastics, which is sent with redundant handsets, network and IT for controlled landfill. Recovered materials are equipment waste. listed in Chart 1.

As with all legislation, we aim to enter into In the UK, we have actively encouraged our See what you can do. the spirit of the law and ensure compliance. corporate customers to use our recycling The European Commission Waste, Electrical initiative and now have 52 registered to the and Electronic Equipment (WEEE) Directive will scheme, including WS Atkins and Autoglass. This is how you can recycle your mobile phone be implemented in each of our main countries We are considering encouraging these and mobile accessories: of operation, requiring us to ensure that companies to launch their own phone- processes are in place for recovering redundant recycling initiatives for their customers. mobile handsets and accessories. We have • Bring in your redundant mobile handset processes in place to assist in carrying out our We have used a proportion of the revenues to an O2 shop... obligations under the WEEE Directive when raised through our recycling schemes to • ...or post it to us using the address: they are finalised. support Rainforest Concern in their initiatives to preserve rainforest in Ecuador, as well as ‘Freepost O2 Recycling’ (UK only) Recovering handsets local environmental initiatives such as the • O2’s recycling partner will either recycle your Our phone recycling schemes ensure that National Tree Week in Ireland. phone in a carbon-neutral manner customers, employees and the public can safely dispose of redundant handsets for We have recovered around 170,000 mobile • …or re-sell it in a country where recycling recycling or re-use. These schemes ensure handsets since we began this work in 2002. facilities already exist that the process of refurbishing or recycling In 2004/05 we collected only 22,948 handsets • O2 will donate generated funds to support phones does not result in significant amounts – a drop of almost 90,000 on the previous rainforests and a local charitable initiative for of waste going to landfill and equally that the year. About 40 per cent of the recovered every phone you bring in... refurbished phones are sold in countries where phones were refurbished for re-use and some appropriate recycling schemes are in operation. 630 kilogrammes of materials were recovered • ...and you have now supported the preservation for other uses. Airwave handsets have a five- and re-forestation of the Intag region of year manufacturer’s guarantee and are not Ecuador as well as a community project in your subject for take-back until 2008. own country!

24 www.o2.com/cr/report2005/sustaining CHART 2: Recycling of general waste in 2004/05

Paper & card Metal 1,264,026 kg 52,510 kg

Plastic Wood 40,500 kg 6,114 kg

Glass Total 3,141 kg 1,366,291 kg

Increasingly we are competing with many Reducing waste from our offices All of our businesses are commercial and community organisations and shops that collect handsets as part of their business We continue to develop our approach to now ISO 14001 registered. or fundraising activity. At a time when people accurately measure our waste streams. Areas are changing handsets regularly, we recognise that require increased focus are those where that 100 million phones could reach landfill our contractors or retail partners handle waste. each year in Europe alone. We acknowledge we must raise our performance here and have We believe we have already made good set a target to collect at least 150,000 handsets progress in our offices where we have for re-use and recycling by March 2006. established procedures to separate, collect and recycle paper, cans and plastic cups. Upgrading network equipment In 2004/05 we exceeded our Group target We aim to ensure that the equipment we to increase the proportion of office waste use in our networks is designated for re-use recycled by 10 per cent. In total this amounted or upgrade. Consequently, we do not expect to 2,827 tonnes of waste, of which 48 per a lot of waste to arise from the roll-out of our cent was recycled. We have also identified 3G networks. Redundant network equipment other waste streams that can be recycled and is processed for re-use and recycling through have established a specific process to manage our environmentally accredited partners. computer waste for our UK offices.

O2 UK in collaboration with one of our We are working with a partner that actively main network equipment vendors changed seeks innovative solutions to IT recycling, the procedures of delivery and installation which includes a total solution for recycling of our 2G Ultrasite Equipment, resulting in cathode ray tubes from computer screens. the following benefits: Other initiatives are IT waste recycling facilities and installation of refurbished equipment in • one on-site assembled cabinet, instead schools in developing countries. of four separately packaged units; • reduced packaging materials and installation time by at least 30 per cent respectively, with a consequential reduction in power consumption by installation teams.

www.o2.com/cr/report2005/sustaining 25 Energy consumption and greenhouse gas emissions TABLE 1: Proportion of electricity consumption derived from renewable sources in 2004/05 Our networks account for 83 per cent of our non-transport energy consumption, with our offices and shops accounting for the UK Ireland Germany Isle of Man remainder. Our aim is to manage energy use carefully and we aspire to cut consumption over time while using more power from 19% 30% 11% 9% renewable sources.

It is difficult to get an accurate sense of our performance in this area at a time when our business is growing fast and when we are TABLE 2: Summary of O2’s environmental impacts in 2004/05 introducing new communications networks to accommodate technological advances. As we grow, we inevitably use more energy. To get Energy consumption Total consumption CO emissionsa Consumption from a proportional view of our energy-efficiency 2 and CO emissions kWh tonnes renewable sources kWh performance we have begun to measure 2 consumption in new ways. These include Electricity b energy consumption per active O2 sim card and per base station. This reflects the size and Network (switching and cell sites) 425,589,698 199,018 72,841,072 output of our network, and consumption per customer. We have reported these measures Offices (including call centres) 55,855,679 27,671 10,469,960 for the first time this year, see Table 1, and Shops 14,896,760 6,968 2,758,965 hope to establish our performance trend over the coming years. Natural gas b We recognise that our energy consumption increased considerably during 2004/05 due Network UK (switching sites) 5,995,569 1,139 to the introduction of our new 3G network, the completion of the Airwave network Offices and shops (UK, Ireland and IOM only) 17,757,314 3,374 and greater uptake of data services. The consumption figure of nearly 500,000 TOTAL 520,095,020 238,170 86,069,997 (16.5%) Megawatt hours (Mwh) also includes the c energy consumption of some switching TOTAL per active sim card 21.1 9.6 (kg) centres which had not been captured previously, TOTAL per base station e 20,358 9.3 (tonnes) due to limitations in measurement activity.

We have engaged with the Carbon Trust to Business road travel 42,931,096 kms help us reduce our carbon emissions and to understand our impact on climate change. Water consumption From this partnership we will develop a Carbon (excludes Airwave, O2 Germany and Manx Telecom) 121,247 m3 Management Programme concentrating on energy, emissions and transport. Initially we expect the initiative to help us map our carbon Waste management and recycling Total kg Recycled kg profile and to establish quantifiable carbon General wasted from offices and call centres 2,827,445 1,366,291 (48.3%) emission reduction targets by March 2006.

Our uptake of electricity from renewable sources continues to increase. In 2004/05 we a) Factors used to convert kWh electricity to tonnes CO2: 0.00043 (UK, Defra 2004); 0.00049 (Germany, IEA 2002); 0.00067 reached the highest levels so far of 16.5 per (Ireland, IEA 2002). Natural Gas 0.00019 (Defra 2004). cent, ahead of our target to reach 10 per cent b) Electricity and gas consumption are reported for all premises and operations where O2 is the direct customer. Group-wide by 2010. We are currently Some rented premises may be excluded. c) A sim card is a tiny rectangular card found in all mobile phones that acts as an ID card for the phone. undertaking assessments of our offices and If the card is taken out, the handset stops working. The number of active sims is a good measure of the output of our phone network. base stations to explore opportunities for At the end of 2004/05 we had approximately 24.0 million active sims. alternative energy sources, e.g. through d) General waste means all waste generated, excluding hazardous waste and electrical/IT waste. wind turbines on our mast constructions. e) There were 25,548 base stations at the end of FY 2004/05 (vs 19,581 last year).

26 www.o2.com/cr/report2005/sustaining Transport emissions We will use the results of these assessments The main areas of transport emissions occur in working with those suppliers to help them TABLE 3: Impact of O2 UK third-party contractors through network maintenance, retail overcome any environmental risks they may distribution – both undertaken by contractors face. Our environmental procurement policy Travel by contractors Distance Estimated fuel – and business travel. To understand the true guided us in the negotiations for a printing maintaining the network travelled consumptiona impact of our operations on the environment, management provider to ensure that all paper of base stations (kms) (litre) we managed in 2004/05 to capture some came from sustainable resources. For more of the energy consumption by our main details on this and our approach to labour Diesel vehicles 1,065,451 95,890 contractors, see Table 3. standards in the supply chain, see page 17. Dual fuel/LPG vehicles 70,566 6,350 We have conducted a green travel survey www.o2.com/cr/report2005 within O2 UK and the resultant Travel by contractors recommendations led to the roll-out of an Ozone-depleting refrigerant gases distributing products employee car-share scheme in Leeds. The We use refrigerant gases in our air to shops scheme is now being considered in our other conditioning. We have increased the use of UK locations. We remain committed to using these gases by 15 per cent during 2004/05 Diesel heavy goods vehicles 1,193,790 326,023 due to the roll-out of new communications effective technologies – like audio and video TOTAL 2,329,807 conferencing – to cut down the amount of networks. However, we have made a clear business travel for O2 employees. shift away from ozone-depleting HCFC gases a Fuel consumption numbers have been estimated using data from the UK Vehicle to HFC gases that have no ozone-depleting Certification Agency and Defra Environmental procurement potential, although they are still greenhouse We continue to work with our main suppliers gases. As part of our refrigerant replacement (by value) to understand how they are programme we have reduced HCFC gases a managing their own environmental impacts from 68 per cent of the total to 26 per cent. TABLE 4: Refrigerant gas use in line with our environmental policies. We are also considering the feasibility of refrigerant-free air conditioning, such as 2003/04 2004/05 Annual change Our worldwide procurement, valued at forced-air systems. kg kg kg (%) around £2.2 billion a year, makes this an important part of O2’s environmental Local pollution risk commitment. We achieved our target of installing 100 HCFC 8,267 3,653 -4,614 (-56%) per cent secondary protection of diesel tanks HFC 3,874 10,340 + 6,466 (+167%) We publish our policies on our procurement at our fixed installations by March 2005. TOTAL 12,141 13,993 + 1,852 (+15%) website and aim to communicate the standards In January 2005, approximately 1,000 litres we expect of our suppliers when we draw up of oil was leaked to the ground in Ireland. a Excludes O2 Germany and Airwave contracts. We encourage suppliers to spread A thorough clean-up operation took place best practices to the companies they buy of the contaminated land. from. In 2004/05 we issued self-assessment questionnaires to some 20 of our key There were no environmental fines or suppliers to check their environmental enforcement actions against our operating management practices. businesses last year. We went on to achieve our target of 100 per cent secondary protection of diesel tanks at our fixed installations by March 2005. We continue to work with our suppliers to ensure that they are managing their own environmental impacts in line with our policies.

www.o2.com/cr/report2005/sustaining 27 Our aim is to provide the conditions, business strategy, rewards and work/life balance that will give our employees real pride working for O2.

28 www.o2.com/cr/report2005/balancing Balancing

A BETTER PLACE TO WORK

It is our 16,059* employees that make O2 mandatory e-learning for all employees BITC AND GRI REFERENCES what it is, and it is their skills and hard work and operate a confidential helpline for our WORKPLACE that allow us to get our offer to customers employees who may have concerns about 3.2, 3.6, 3.7, 3.10, 3.11, 3.12, 3.14, right. Our aim is to provide the conditions, inappropriate business practices. 3.15, 3.19, 3.20, HR4, HR5, HR6, business strategy, rewards and work/life balance that will give everyone real pride O2 is working to develop and nurture its HR8, HR9, HR10, HR11, LA1, LA2, working for O2. leaders and managers to motivate and LA3, LA4, LA5, LA6, LA7, LA8, LA9, manage their teams towards performance LA10, LA11, LA12, LA13, LA14, Communication is at the heart of this excellence. LA15, LA16, LA17 and IO3 commitment. We encourage dialogue with our employees through regular business To this end, the Reflect O2 programme updates, team briefings, works councils, continues to be a channel for employee employee forums, and through good relations feedback and the assessment of employee with recognised trade unions. engagement levels throughout the Company. The programme consists of a survey on how On 31 March 2005, 79 per cent of our UK O2 employees view their leaders, the way they workforce was represented by trade unions are being managed, the O2 spirit and O2’s and, during the year, we began to hold twice- focus on its customers. Each department yearly meetings with our European Works devises action plans in response to the survey Council where representatives from across results. The survey is useful in making sure our the business discuss Group performance employees know that they are valued and to with senior executives. engage with them on the direction and strategy of the Company. In 2004/05 we increased our workforce by 15 per cent across the Group. The turnover In 2004/05, 79 per cent (more than 13,000) of staff reached 17 per cent during the year. of our employees took part in the Reflect O2 survey. In the survey, 81 per cent said they Engagement felt proud working for O2. This result had We want our managers and leaders to improved by two per cent from the previous engage closely with employees, helping them survey, and was similar to an upper-quartile to perform to the highest standards. benchmark reported by Maritz Research. Although the questions set from 2003/04 Our Business Principles and values set the were redesigned for greater clarity and standards of behaviour that everyone in O2 usefulness, eight of the nine questions is encouraged to live by at work. We provide retained from the previous survey showed

*16,059 people in post-PIP; 14,914 full-time equivalent (FTE)

81 per cent of our employees are ‘proud to work’ for O2.

www.o2.com/cr/report2005/balancing 29 PAUL OGINSKY, CO-FOUNDER AND STRATEGIC an improvement in scores. The Reflect scores We aim to treat everyone fairly, impartially and DIRECTOR, WESTON SPIRIT highlighted, among other things, to O2 UK’s without prejudice, regardless of race, colour, management team, that it could be more nationality, ethnicity, religious affiliation, effective at motivating employees to achieve gender, sexual orientation, marital status, “Like us, O2 shares a excellence. The score of 56 per cent encouraged age, disability or caring responsibilities. commitment to the senior managers to put in place a series of We do not allow child, forced or compulsory events focused on engaging their employees. labour in our organisation. achievement of young Following the communication of the 2004 We have a complaints procedure that guides people. Thanks to O2’s results, team briefings and action planning employees in any situation of grievance. Issues have been taking place throughout the can, for example, refer to discrimination, ‘charity partnership’ business. Discussions take place to share promotion, pay, management or job further understanding of the reasons behind description. We aim to ensure that every case support, we’ve already the scores, so that appropriate actions can be that is reported to the HR department is taken to address the feedback. Some teams reviewed to determine if there is any necessary been able to make a real have experienced higher levels of enthusiasm in follow-up action. We monitor discrimination and long-lasting impact Reflect action planning because they can see cases carefully and aim to improve our that their leaders and managers take their performance where possible. feedback seriously. on hundreds of young In the UK an employment tribunal suggested lives across the country. During 2004/05, a new performance we review our policies to include a capability management system and an online annual process. In response to this recommendation, This is being achieved performance review system led to a reduction and to ensure our policies were up to date of 95 per cent in performance review with legislative changes, we launched a new through our new, joint grievances and to 100 per cent completion Conduct, Attendance and Performance policy of managers’ annual performance reviews which includes a capability process (ie, a way mentoring scheme.” in the UK. of ensuring that a person’s skills could be upgraded to fit them for promotion). At the O2 in the UK recognises two unions – same time we introduced both an individual Connect and the Communications Workers and line manager’s guide to ensure everyone Union (CWU). CWU negotiates on behalf of was clear on what is expected of them. all non-managers in the UK. The Employee Relations Team works closely with the We aim to offer competitive rewards and See what you can do. recognised unions on relevant matters such the opportunity for eligible employees to as consultation on key business events, participate in sharesave, share ownership and and negotiations on changes to terms and option plans. Employee benefits often extend TIPS ON MANAGING STRESS conditions such as the annual pay reviews. beyond statutory requirements. For instance: 100 per cent of O2’s employees are in the UK we offer each permanent employee • Take a deep breath! represented in the European Works Council. the opportunity to join the O2 Pension Plan, and to benefit from life and personal accident Try taking a minute to slow down. Our culture insurance. Middle and senior managers can • Manage time We want O2 to have a culture of high also enjoy the benefits of the Company’s car Plan ahead. Make a reasonable schedule. performance, and one in which individual scheme and health care plan. In 2004/05 the • Connect with others abilities are fostered and people can thrive Group employment costs were £613 million. A good way to combat sadness and loneliness in jobs and careers that they enjoy. is to seek out activities involving others. Our approach is to have clear and open Training and development employment policies and we aim to apply To ensure we have the right capabilities to drive • Talk it out them fairly and consistently. the future performance of the business we run Talking with someone else can help clear the O2 Executive Development Programme your mind of confusion. The United Nations Universal Declaration (EDP). This is designed to underpin the • Monitor your physical discomfort of Human Rights and International Labour development of O2’s six leadership capabilities. Be as physically comfortable as the situation Organisation Declarations guide our will allow. employment policies. In 2003 we benchmarked All employees are requested to develop a all our employment policies against these personal development plan with their line • Get physical universal codes to ensure our compliance managers to ensure continuous learning and Physical activity plays a key role in reducing and we have established a human rights policy improved business performance. Following and preventing the effects of stress. that cements our approach to this. Our Group an audit of our training systems and in direct • Take care of your body security department has been trained in human response to it, the Company launched a new Healthy eating and adequate sleep fuels rights with regards to investigative practices. learning management system for employees. your mind and your body. It is also aimed to track training patterns within O2.

30 www.o2.com/cr/report2005/balancing Every employee must complete a programme Key health-and-safety issues for O2 are safe of mandatory training and attend refresher driving, fire, work at heights, slips, trips and CHART 1: Age breakdown of workforce (%) (Group) training every two years. Every new employee falls, the use of Display Screen Equipment, can attend induction training. In the UK the control of contractors and violence to staff. <20 3% average estimated time for induction training Our health-and-safety policies, procedures and 20 to 24 15% is close to two days. This figure does not activities focus on these key aspects. We have 25 to 29 22% include any other training undertaken, such mandatory health-and-safety training for all 30 to 34 21% as customer service agent training that can employees. In the UK and Ireland we have 35 to 39 17% take up to five weeks. achieved certification to the international health-and-safety system OHSAS18001. 40 to 44 11% We also put in place new training In each of our markets, our performance is 45 to 49 6% programmes in response to changing independently reviewed as part of our 50 to 54 3% conditions. For instance, when employees insurance programme. 2% in our UK stores were affected by violent 55 to 59 customer behaviour, store managers were We have health-and-safety committees in encouraged to take part in scenario-based each of our businesses. In O2 UK a single CHART 2: Gender breakdown of workforce (Group) training carried out in small groups. The formal Safety Committee meeting is held programme was enhanced through team on a quarterly basis. The core membership briefing materials and information posters, comprises Employee Safety Representatives highlighting prevention of violent situations both for managers and non-managers, thus Male 57% and the appropriate procedures for an O2 representing all employees. Other members Female 43% employee to follow. include Trade Union branch secretaries and local Trade Union Safety representatives, We also encourage employees to take an Human Resources, Property and Health and active role in their communities. Some Safety departments, and other attendees employees are given limited paid time off, up who are invited as and when issues emerge. to 18 days in some cases, to fulfil out-of-work CHART 3: Gender breakdown of workforce based on grade (Group) commitments, such as working as mentors, In 2004/05 we did not receive any health school governors, local government officers and safety enforcement notices. and special constables. Non-manager Male 52% Managers consult regularly with recognised Female 48% During the year: trade unions on health and safety matters. We are also represented on the European • O2 UK won The Guardian Public Commission Social Dialogue Committee Services award; Health and Safety Working Group. • O2 Ireland won Best Company to Work For, in the category for companies with 1,000 We comply with key elements of the ILO Safety ManagerMale 69% employees from the Great Places to Work and Health Management System 2001, the UK’s Female 31% Institute; HSG65 and the guideline document supporting • O2 Ireland won a place in the top five the OHSAS18001 standard. Accident reporting IT and telecommunications companies to arrangements are in line with the ILO Reporting work for in Europe competition 2005; Code of Practice 1995. We have not established • O2 Germany was listed 11th in the Great separate policies or programmes on HIV/AIDS Place to Work ranking published by business as this has not been raised as a priority issue CHART 4: Women represented in senior management (%) (Group) magazine Capital. for us in consultations with our workforce or other stakeholders. Personal health, safety and wellbeing O2 plc 25% The health and safety of our employees and We had set ourselves a target of reducing O2 UK (includes HQ) 26.5% our customers is managed under our Group- absence because of work-related injury and O2 Airwave 9% wide health-and-safety strategy, agreed by the illness by 10 per cent. We have since improved O2 Germany 17% O2 Board and overseen by Health and Safety our data collection to confirm that the Champion Peter Richardson, Managing number of days lost from work-related O2 Ireland 54% Director, Airwave. The strategy is published in accidents is actually very low. Manx Telecom 8% full on our intranet, Vital O2.

www.o2.com/cr/report2005/balancing 31 During 2004/05 there were 257 accidents in sick are connected to a qualified nurse MICHAEL, 17, HIGH SCHOOL STUDENT resulting in 487 days lost in sick absences.1 or practitioner for information and advice. FROM WIRRAL Based on our total workforce this is equivalent When we tested this scheme in one of our to 16 accidents and 30 days lost in sick call centres we found that 15 per cent of absences per 1,000 full-time equivalent staff. absenteeism is caused by childcare problems “The 02 peer mentoring Around six per cent of our UK workforce took rather than ill-health. project has helped me in part in driving training. Diversity and inclusion so many different ways – Our main focus has now shifted to improving Any company that wants to serve a diverse the general health of our workforce and we customer base, and draws on the widest confidence, leadership, have rolled out wellbeing programmes across possible pool of talent, needs to reflect the the business to help us improve health and diversity of wider society. We want to create a practical skills, team work, fitness and to reduce absenteeism. genuinely diverse workforce. Our community and marketing initiatives and our product the opportunity to support Following the example set by O2 Ireland’s development all link with this goal too. ‘Perfect Balance’ programme, promoting other young people. It’s wellbeing and work/life initiatives, we Last year we made a commitment to raise launched O2 Balance in the UK in December awareness of our equal opportunity policies also given me a real insight 2004. This offers our employees ways of by developing a diversity action plan and helping themselves to manage their own appointed a diversity champion, Danuta Gray, into the world of work… working life in a healthy way. Among the Chief Executive Officer of O2 Ireland. the O2 mentors have skills services are stress management, mobile Her proposals were put to the Executive massages, weight watching, nutritional advice, Committee in January 2005 and a framework they use every day in the cholesterol testing, yoga classes, and drug and to enable each business to develop relevant alcohol awareness. actions was agreed. This has four key areas: business world that Diversity Awareness, Development of Key Since launch, nearly 4,000 massages have Metrics, Human Resources Practices and we can learn from.” been given to employees at their workstations Policies and Accessibility. in the UK alone. We intend to increase our budget for work-based health activities in Measuring diversity 2005/06 and to concentrate on exercise, To ensure equal opportunities for all we have fitness, nutrition, diet, wellbeing and stress started to monitor diversity more closely by management across all our businesses. tracking internal movements, retention and leavers based on gender, ethnicity and, to a See what you can do. O2 Germany is also pursuing the wellbeing limited extent, disability. initiative and last year set up a subsidised on-site gym – Studio2 – at its headquarters. We are addressing our recruitment policies, TIPS FOR STAYING HEALTHY AT YOUR DESK Advice on a range of health issues, including pay reviews and equal pay monitoring, and heart disease, is being provided as well as free we are gathering metrics to track our progress flu vaccinations. We have also run a stress on ethnicity, gender, and age. We appreciate Workstation set-up: set up safely management campaign and a stop smoking we have more work to do in this respect, and • The chair back is adjusted to support the lumber campaign, in partnership with the German will use the improved data to help us identify region (i.e. the lower back). Cancer Research Centre. trends and take action where necessary. • The top of the legs should be resting lightly on the chair. Our UK Employee Assistance Programme Details of the ethnic composition of the UK • The knees should be bent. offers a range of personal services such as workforce is shown in chart 5 on page 33, counselling, legal and financial advice and and the age and gender profile of the whole • The keyboard height: should be such that the useful contacts for people with, for example, Group in charts 1 to 3 on page 31. arms are straight out in front with hands in depression, marital problems and disability. line with arms. After the Asian tsunami of 2004, we offered The O2 plc Board comprises the Chairman, • The keyboard should be such at least 100 mm appropriate counselling for employees directly Chief Executive Officer, Chief Financial Officer, from the front edge of the desk. one further Executive Director and six affected by the crisis. • Screen height and distance such that head independent Non-executive Directors. We have We are currently piloting a new scheme in one female Non-executive member of the and neck are comfortable. the UK with Active Health Partners. Run along Board, representing 10 per cent of the total. • The head is slightly tilted forward – the top of similar lines to NHS Direct, people who ring the screen should be just below eye level. • A document holder is a good idea to raise the

1 Due to restrictions in health and safety data monitoring documents to the same height as the screen. in Germany, the figures exclude O2 Germany. Data for the • A footrest could be useful for support if your last quarter in 2004/05 has been annualised based on data feet are not flat on the floor. from three previous quarters. • Use headphones, do not cradle phone between head and shoulders. 32 www.o2.com/cr/report2005/balancing Our business is generally well balanced in In Ireland we plan to start Diversity and Disability terms of gender with some 43 per cent of our Awareness training by the end of 2005. CHART 5: Ethnic representation in the UK (non-managers and managers) total workforce being female. The number of In the UK we are members of the Employers’ women holding senior management positions Forum on Disability and of the ‘Two Ticks’ Non-managers Managers in March 2005 stood at 25 per cent. scheme, which supports disabled people in White 53% 47% the workplace. The Company offers flexible and home working arrangements. About 90 per cent We have begun a programme with Job Centre Non-white 73% 27% of those women who are on maternity leave Plus and REMPLOY in the UK to offer pre- return to the business, many of them in part- employment training for potential O2 Not declared 65% 35% time roles. We have 1,259 women and 657 employees, in exchange for a guaranteed job men working part-time in O2 UK, representing interview. The training is aimed at individuals 20.2 per cent of the workforce. The majority with a physical disability or from other of our part-timers are in customer and retail disadvantaged groups, such as men over 50 CHART 6: Part-time employees (Group) jobs, but there are also several examples of with restricted work experience and little hope more senior part-time workers. of finding a new job, or people with previous criminal convictions. The initial trial has already Total 15% Pay audits, which include analysis of gender- resulted in six people being employed by O2. Full-time Part-time related issues where appropriate, are conducted in our business operations. These Reorganisation Male 92% 8% processes allow us to ensure that any gender- In March 2005, the Company announced plans related concerns are addressed and enable for a major investment in the O2 ‘customer Female 76% 24% us to implement a pay strategy that is firmly experience’, including the opening of a fourth focused on improving levels of performance call centre in Glasgow, UK. across O2. The plan will involve recruitment of 2,000 new CHART 7: Length of service (years) Focusing on disability retail and customer service employees over the Disability is a key focus of our work on next two years, offset by the rationalisation of <1 25% diversity – not just in terms of our employees activities in non-customer facing areas and the 1 to 2 18% but in terms of our customers and the reduction of up to 500 permanent managerial community projects we pursue. and administrative roles. 3 to 4 20% 5 to 9 28% Across the UK business we have 56 employees Any process of reorganisation is unsettling 10 to 14 3% who register themselves as having a disability and we have learnt that it is essential to try – representing less than one per cent of the and minimise uncertainty. We consult actively 15 to 19 3% total workforce. We believe the actual figure is with trade unions and employee representatives 20 to 24 1% much higher as many people with disabilities and aim to communicate openly and often with 25 to 29 1% do not identify themselves as registered disabled. everyone affected throughout the process. 30 to 34 1% Much of this communication was led by O2 UK 30 to 39 Less than 1% In Ireland we sponsored the first ever O2 Directors face-to-face or in audio calls. The bulk Ability Awards, run by the Aisling Foundation, of the job losses will be in areas such as the which are designed to raise awareness of UK’s Human Resources, Marketing, Technology best practice in the area of recruiting and Solutions and Operations functions. Our CHART 8: Year-to-year permanent employment growth (% increase in 2004/05) employing people with disabilities. As a objective is to support those leaving the result, we are working towards meeting the Company by offering redundancy terms that O2 plc 15% standards, procedures and recommended exceed the statutory minimum and to give O2 UK 20% best practice employed by this campaigning them added support, such as CV surgeries O2 Airwave 11% organisation. and job-seeking workshops. O2 Germany 12% Following an internal survey in which 629 O2 Ireland 3% employees said they experience some difficulty Manx Telecom -1% reading online, we invited the Royal National Institute of the Blind to audit our internal website, Vital O2. We have started to make changes to ensure accessibility and have communicated to employees ways to set up their computer screens to help them see and navigate more effectively.

www.o2.com/cr/report2005/balancing 33 We are very proud of the strong community spirit in O2.

34 www.o2.com/cr/report2005/involving Involving

ACTION IN COMMUNITIES

We are very proud of the strong community In 2004/05 our total cash donations as O2 BITC AND GRI REFERENCES spirit in O2. Group reached £2.2 million, 0.7 per cent of COMMUNITY pre-tax profits (£1.7 million in 2003/04). Apart 2.18, 3.11, 3.12, 3.19, EC10, HR14, Our community programme – called ‘Can Do from our in-kind and time donations, in the in the Community’ – aims to support charities SO1, SO4 UK alone we gave in excess of £600,000 to and causes that can put mobile services to charities and other organisations. Using the good use in society and give people in O2 London Benchmarking Group (LBG) community opportunities to volunteer their time to the investment standard, we have categorised communities in which we work. 82 per cent of our contributions as cash, 14 per cent as in-kind service and product The active involvement of O2 people in donations and four per cent as employee time. these projects has an important role to play in developing the Company, fostering skills In 2004, O2 won the Charities Aid Foundation and strengthening our brand and reputation. Corporates and Communities Award for Online Reporting for an “outstanding Across the Group, employees are now contribution” to communications in corporate working as volunteers in our community community investment. projects. We also help employees who do important community jobs in their own right – Local action such as working as school governors or on We have devolved the management of charity boards – offering paid time off to our ‘Can Do in the Community’ investment carry out their duties. programme to our individual operating businesses because they are best placed Encouraging employee involvement to understand local community needs. This Through our Can Do Matching scheme, we activity is overseen by the Group Corporate support employee fundraising activities by Responsibility Forum and regularly reported matching funds by up to a total of £350 for to the Executive Committee and Board. an individual and £1,500 for a team. Since the launch in 2003, more than 130 applications We try to work with charities that match the have been processed and more than £130,000 corporate responsibility challenges we face, has been raised to benefit charities. such as child protection, privacy and recycling. We are naturally drawn to four main areas: In the UK we operate Can Do Giving, a Give youth, education, health and environment. As You Earn scheme, through our payroll. This is an easy way for employees to support their Youth and education favourite charities. Contributions are exempt Group-wide we continued to work in from tax and include a further 20 per cent partnership with the International Youth donation from the O2 Group. In 2004/05 we Foundation (IYF), voted by our employees started individual online accounts, which have as our main charity for 2003/04. boosted participation by more than 100 people, and increased the uptake to 4.3 per cent of our UK workforce. We are now extending the scheme to our other businesses.

www.o2.com/cr/report2005/involving 35 Known as ‘What Youth Can Do’, our two-year O2 Germany has worked with the German partnership concentrated on youth-related Olympic Association to encourage sport and CHART 1: Contribution across the Group (%) social issues in each of our main markets. fitness among pre-school children. The In-kind 14% Under the umbrella of this IYF partnership, O2 business has also linked with Power Child, Time 4% UK supported the Foyer Federation to address an organisation combating child abuse, homelessness among young people and and is examining further ways to get involved Cash 82% supported campaigns to help build with child protection. independence among the young. O2 Germany established an online educational project with Manx Telecom, our business on the Isle of the German Children and Youth Foundation Man, has continued to support employee and O2 Ireland supported the Communication fundraising for a new £2.0 million hospice, and Information Technology for Youth (CITY) which will have the island’s first children’s unit. CHART 2: Geographical breakdown (%) programme in Ballymun in Dublin, helping Environmental protection vulnerable young people by giving them We support a number of environmental UK 26% communication and creative skills through organisations. Funds generated through our the use of technology. Germany 58% handset recycling schemes benefit, among Isle of Man 1% In early 2005, O2 UK partnered with Weston others, Rainforest Concern and the National Tree Week in Ireland. Spirit as its new charity of choice. Weston Ireland 15% Spirit aims to help disadvantaged young people O2’s support for Rainforest Concern allows and shares O2 UK’s current commitment to the charity to establish watershed reserves in the issues of youth at risk. O2 Germany has the Intag Region of Northwest Ecuador, one continued to support the award-winning CHART 3: Main areas of involvement (%) of the most biodiverse areas in the world. project SCHOLA-21, an interactive learning and information network promoting self- Since the start of the partnership, Rainforest Education and young people 35% confidence and citizenship skills among young Concern has managed to double the size of Emergency relief 26% people in European schools. Working with a watershed reserves to secure clean water Health 13% media company and the Institute of Film in supply for 15 communities comprising 920 Science and Education, O2 Germany also families. The project has seen a total of Arts and culture 6% helped produce an interactive learning 17,000 trees planted with a further 12,500 Environment 2% programme – Polly and Fred – to promote trees currently being propagated. Community sports 3% responsible mobile phone use among children Economic development 1% as part of the school curriculum. Other 14% Employees in Ireland continued to back Children’s Hour, Junior Achievement and its existing partnership with Business in the Community to mentor secondary school CHART 4: Breakdown per category for Group (%) children in Limerick and Galway. National Tree Week in Ireland takes place Inclusion, health and wellbeing annually with the aim of distributing and In 2004/05 O2 Ireland asked employees to planting 15,000 trees each year. Airwave Community help formulate its community investment Charitable gifts 44% has begun a volunteering scheme with investment 45% strategy. The employees expressed a desire the National Trust and the British Trust for to focus on young people with disabilities, Conservation Volunteers to protect beauty particularly in the area of communication. spots and reclaim disused industrial land. Commercial initiatives 11% During the year, O2 Ireland sponsored the first O2 Ability Awards, broadcast on national O2 Community Awards Event television, to recognise companies that We launched the O2 Community Awards demonstrate best practice in the recruitment in October 2004 to recognise people in the and employment of people with disabilities. Company working in their community and O2 Ireland also sponsored the RehabCare Gala demonstrating skills beyond their job role. Banquet that raised some of the funds needed The judges, including community and to implement Ireland’s first national suicide employee representatives, short-listed a prevention programme. number of employees and donated £4,000 to each of their charities. The overall winner

36 www.o2.com/cr/report2005/involving was an O2 Ireland employee working with the Cheshire Activity and Motivation Project THE LONDON BENCHMARKING GROUP MODEL

(CAMP) which, as the winning organisation, 1. Intermittent support to a wide range of good causes received £10,000 from O2. in response to the needs and appeals of charitable and community organisations, increasingly through partnerships between the company, its employees, Emergency relief customers and suppliers. There was overwhelming support from our CHARITABLE 1 GIFTS employees and customers for the victims of 2. Long-term strategic involvement in community partnerships to address a limited range of social issues the 2004 tsunami disaster. COMMUNITY chosen by the company in order to protect its long-term 2 INVESTMENT corporate interests and to enhance its reputation. With the rest of the industry, we set up a 3. Activities in the community, usually by commercial short premium rate text code for the public to COMMERCIAL INITIATIVES departments, to support directly the success of the make donations to the Disasters Emergency 3 IN THE COMMUNITY company by promoting its corporate brand identities and other policies, in partnership with charities and Committee. Administration costs were waived community-based organisations. and, with agreement from HM Customs & 4 BUSINESS BASICS Excise, all donations were zero-rated for VAT. 4. The core business activities in meeting society’s needs for cost-effective goods and services in a manner which Our network’s appeal raised £1.0 million. is ethically, socially and environmentally responsible.

For several weeks, O2 Ireland waived call charges to the afflicted region and O2 Germany gave up space on TV advertisements to allow charities to publish their hotlines. All in all our direct contribution to tsunami appeals amounted to around £414,000 with employees contributing £133,000. COMMUNITY ASSURANCE STATEMENT

Fundraising by text The Corporate Citizenship Company has been commissioned to provide assurance of the community Donating by text is an innovative use of involvement section of O2 plc’s corporate responsibility report 2005 (pages 35-37). Our approach was mobile as a fundraising mechanism for based on the principles of the AA1000 Assurance Standard, relating to materiality, completeness and charitable causes. The Tsunami Earthquake responsiveness. Our work included independently consulting a sample of O2’s community partners, Appeal and the Live 8 event in July 2005 are using benchmarking techniques to assess comparative practice by other companies, checking the examples of how this mechanism can be used validity of key facts and assertions in the report, and reviewing community contributions data against on a large scale in the UK. In both cases, O2 the evaluation principles of LBG (London Benchmarking Group – managed by us on behalf of its 100 and the other UK operators have or will not corporate members). profit from the appeals. Realising the benefits In our opinion, the report provides a fair and balanced representation of O2’s community involvement of text donations, we believe that an activities. In particular, community partners attest to the quality of their relationships with the increasing number of charities will take up this Company and the responsiveness it displays. We have found that the LBG evaluation principles have new form of fundraising. O2 UK is currently been correctly and consistently applied, with an effective Group-wide system for recording and identifying the set-up and management costs reporting contributions. From our benchmark work, we believe O2’s programme is notable for the for facilitation of charity text donations. We clarity of its overall objectives and for its focus on the special contribution the business can make are open to any suggestions of how this might through its products and services. be done more effectively or efficiently. Going forward, we believe an opportunity exists for O2 to use this clear focus to show the community Benchmarking and business benefits that are being achieved, by putting in place systematic measures of outputs and The 2004 corporate responsibility assurance longer term impacts. With the growing emphasis on employee engagement, greater resources are report by Ernst & Young highlighted a being committed to the programme, both corporate and personal, and new possibilities are opening weakness in measuring the impact of our up for enhanced results. community projects. In response we developed a database to record and value our activities The Corporate Citizenship Company using software based on the London www.corporate-citizenship.co.uk Benchmarking Group model. We have also June 7, 2005 worked with the Charities Aid Foundation to produce a grant monitoring procedure, with third party assessment, that will apply to any project worth over £5,000.

www.o2.com/cr/report2005/involving 37 Manx Telecom

Our community investment programme is, therefore, crucial. It provides us with a way to support issues of great importance in our community. Making sure we manage our impact on the environment is vital too. We want to help to preserve and enhance the quality of life on the Isle of Man.

Supporting the ‘e-Island’ We always aim to reduce prices where possible and pass on cost savings to our customer. We do not benefit from the economies of scale of larger marketplaces, but we still need to make TIM CRAINE, ISLE OF MAN GOVERNMENT the investment to provide the latest products BUSINESS DIRECTOR and services to our customers. “ I have worked closely with Manx Telecom CHRIS HALL, MANAGING DIRECTOR, Last year, we committed to a three-year, for the past four years and have always MANX TELECOM £30 million capital investment programme. One been impressed by the way in which they of the results of this was a new billing system, installed in November 2004, which has enabled link the fortunes of the Isle of Man to us to offer more inventive pricing packages. We their own success. Because of this, we “As the major supplier of fixed line, have recently launched two new packages, one have developed an excellent working mobile and internet services on the for residential customers offering free local calls relationship to maximise the inward Isle of Man we have a responsibility at evenings and weekends, and one for mobile investment potential based on a world to make sure we really meet the customers which gives them ‘100 local Free needs of our customers for excellent Minutes’ per month. class telecoms infrastructure.” communications at good value. But we can provide value for this unique It has always been our policy to support the community in wider ways too. That’s Government’s ‘e-Island’ strategy and, as part where our community programme – of this, we have continued to invest to provide concentrating on youth, sport and IT – ADSL (Asymmetric Digital Subscriber Line) come in. So does the work we have broadband services over fixed telephone lines done to improve our environmental to as many of our customers as possible. Last performance and the support we give year we increased coverage in some remote to the Government in providing the areas still further by fitting connectors called high-technology infrastructure to mini-DSLAMs to street cabinets where we attract new businesses to invest in knew demand for broadband was high. As a the island.” result, access to broadband is now available to around 99 per cent of homes and businesses Seeing customers as neighbours on the Isle of Man, and take up is currently As the major communications company on around 19 per cent. We plan to install up to a the Isle of Man, we are a very visible business. further seven mini-DSLAMs in the next year. We provide fixed line, mobile and internet services to our customers and aim for high- The Government has continued to encourage quality communications that are good value, people on the island to take up broadband within the terms of our 15-year licence from services, by subsidising the initial connection the Isle of Man Government. charges.

But we are also in a very real sense neighbours Child protection to our customers and it is important that we Manx Telecom does not actively market to understand and respond to their needs and under-16s. As part of its work with the their concerns. emergency services, each year it takes part in a ‘Crucial Crew’ event showing up to 700 children how to use mobile phones for

38 www.o2.com/cr/report2005/manx emergency services and educating them about of their choice. An overall winner is chosen the responsible use of mobile phones. Also, every year and receives a further amount for Key data Manx Telecom provides free advice and free charity, presented at our annual employee downloads for users of its services as well as awards dinner. links to a variety of related sites for parents regarding child protection and safe internet use. Employee wellbeing is critical so we provide free regular health screening for employees, free Number of customers Community investment annual flu vaccinations, and external counselling Young people are the main focus of the and occupational health professionals to give 63,000 community initiatives and we want to support support whenever necessary. Number of employees them to become involved in sport, to get more from their education and to understand Our annual Reflect survey had an excellent 296 and exploit IT. response rate with a good overall satisfaction score. Employees are actively engaged through Permanent employees The Telecomputer bus continues to provide team meetings, cross-functional breakfast a powerful extension to learning in the meetings and focus groups to identify actions 100% classrooms of local schools with a suite of we can take to maintain or increase scores. recently upgraded computers and new Women in senior management software. We also sponsor a range of sport As part of our continuing drive to improve events, including a swimathon, youth cricket our policies and practices, linked to our 8% teams and coaching. We continue to provide ISO9001:2000 quality standards we have CO emissions work placements in our offices for young regular external health checks to monitor our 2 people with special needs. performance. We also work proactively with 2,103 tonnes our unions to identify and address issues Health has also been an important focus for affecting our workforce. Waste recycled from buildings community investment in recent years. Thanks to tremendous fundraising activity by our Environment 6.4% employees, we have been important partners We take great care to manage our impact in the Mighty Oak appeal to build a new on the environment by managing our energy Number of mobile handsets recovered hospice with the first ever children’s unit on use and water use, reducing waste, recycling the island. To date the appeal has successfully and by sourcing responsibly. During the year 394 met its initial target of raising £2.0 million to we were successful in gaining accreditation to the ISO 14001 environmental standard, begin work on the new centre. Total community contributions a major achievement for the company. (cash and in-kind) Last year we also began working with e-San to use mobile technology to help asthma We aim to consult communities carefully c. £30,000 sufferers monitor their condition and keep in as we develop our infrastructure. Where touch with medical staff. This project – which our mobile network is concerned, we follow follows a similar successful trial by O2 UK – the Ten Commitments on responsible mast Main areas of involvement siting developed by the Mobile Operators’ involved 15 patients, between the ages of Community sports 31% 19 and 25. Association. We apply for planning permission, even where this is not strictly Arts and culture 4% Our employees required as rigorous local regulations also We want our employees to be proud of a provide a further level of vetting for our Education and young people 44% workplace that enables them to contribute network development plans. Emergency relief 7% their best to the business. Our continued ® success depends upon the application of The Fonebak scheme, run with Shields Environment 3% their skills and talents in the business and Environmental, to recycle mobile phones Health 8% on their wellbeing and job satisfaction. is now up and running. During the year we recycled or reclaimed 394 phones. Other 3% Our policies and procedures support employee development and the acquisition and Each year, when the latest telephone Type of contributions application of new knowledge and skills. directories are distributed, we work closely In 2004, 13 members of staff completed with Douglas Borough Council (DoLGE) Waste Cash 90% company-sponsored professional and Management team to encourage people to Time vocational qualifications. recycle their old directories. We also recycle 4% other equipment, such as telegraph poles, and In-kind 6% We monitor external and internal feedback we have provided the investment to replace all and reward an outstanding employee every our single-skinned underground diesel tanks month with £100 to donate to their charity with above-ground double-skinned tanks.

www.o2.com/cr/report2005/manx 39 Targets and Objectives KEY ACHIEVED PARTLY ACHIEVED REVISED TARGET TARGET NOT ACHIEVED Progress against previously set targets and objectives

GRI References: PR4 and 3.19

Objectives Targets Status

ENGAGING – Management Strategy Embed management of social, environmental and ethical issues into the Establish key performance indicators (KPIs) for each operating business mainstream of the business. within the performance management structure. External dialogue Continue engagement with stakeholders to ensure continuous responsible Establish a system to capture and share information acquired through management of our business. stakeholder dialogue.

ACCESSING – Marketplace Protecting the vulnerable Implement the Code of Practice on adult content: ensure protection Implement the UK Code of Practice. of children and other vulnerable people from inappropriate content.

Launch the Irish Code of Practice.

Supply chain Continue efforts to implement ethical and environmental Continue engagement with main suppliers, including the distribution of self- procurement policies. assessment questionnaires to smaller suppliers with a medium-to-high ethical risk profile. Customers Ensure ability to meet the needs of all customers and deliver excellent Implementation of customer-centricity strategy. service, wherever they are.

PROTECTING – Health Health & environment Act responsibly in all matters of health and safety, provide clear Improve means of informing the public and employees about health issues, using information about how our technology works, and manage public the intranet, our external website, and by reviewing the contents of our leaflets to concern through risk communication. cover future technology applications. Ensure that clear health and safety information is available with O2’s products.

SUSTAINING – Environment and Sustainability Environmental management Establish consistent approach to environmental management All businesses certified to ISO14001 by the end of 2004 (O2 Ireland registration across the business. achieved February 2005 – target of certification still achieved). Contamination All stored fuel to be secondary-protected by March 2005. 100 per cent double-skinned tanks not achieved to initial target date, but completed by March 2005. Waste Work towards a more integrated and better-monitored approach to waste Increase the proportion of office waste recycled by10 per cent. management to minimise waste.

Ozone-depleting gases Minimise our negative impact on the environment and aim to become Reduce our holdings of HCFCs by 10 per cent by 2010. refrigerant-free in the long term.

Re-use and recycling Explore opportunities for managing hardware computing waste. Research various opportunities for handling computing waste. Target not achieved within initial timeline. New target was set for March 2005.

Integrated health Reduce fuel consumption, CO2 emissions and the health and safety risk Increase use of audio, video and web conferencing by 10 per cent, with evidence safety & environment of our employees when driving. of proportionate reduction in mileage against 2002/03 data. Target not achieved, due to difficulties in data measurement. A new target has been set to replace this one.

BALANCING – Workplace Equal opportunities and Address our recruitment policies, pay reviews and equal pay monitoring to Develop an action plan to reflect the aspirations of the diversity steering group. diversity management reflect an integrated approach and to establish our drive for inclusiveness.

Ensure consistent approach to managing health and safety across the Reduce number of days of sick absence from work-related injury or illness by Group: and identify, assess and eliminate, reduce or control significant 10 per cent by March 2005. hazards associated with our undertakings.

Engender a culture that demonstrates a zero tolerance of injury or ill Achieve zero enforcement actions by the health and safety enforcement agencies. health arising from work activity.

INVOLVING – Community Community investment Community investment work to use main assets appropriately Measure the short-term effects of our current major community involvement projects. to demonstrate that mobile technology can have far-reaching and positive effects. Increase the participation and contribution of employees through ‘Can Do Giving’ by 25 per cent.

40 www.o2.com/cr/report2005/performance Targets and Objectives KEY NEW ONGOING New targets and objectives for 2005/06 (unless otherwise stated)

Objectives Targets Status

ENGAGING – Management External dialogue Establish procedure to measure and track stakeholder engagement to Establish a process for stakeholder engagement monitoring, to be captured by our ensure effective decision-making and management of key corporate online risk management system, by March 2006. responsibility issues.

Business Principles Continue to encourage confidential reporting by employees of breaches Further enhance our reporting system and include compliance monitoring in internal of our code of business ethics and monitor actions taken to investigate audit plans. such reports.

ACCESSING – Marketplace Protecting the vulnerable Establish increased awareness among customers about responsible use of Increase the profile of child-protection information and the capabilities of O2 stores mobile phones. to inform customers about the responsible use of mobile phones by March 2006. Supply chain Continue efforts to implement ethical and environmental procurement Increase awareness of policies within O2’s procurement teams. Increase supplier policies. audits of principal suppliers, and help establish a common industry code for supplier audits.

PROTECTING – Health Health research Continue the commitment to help fund and support independent research Fund independent and peer-reviewed research into alleged health effects of mobile into alleged health risks of mobile communications. communications. Agree contract for funding the Mobile Telecommunications and Health Research phase 2 programme with the Department Health by October 2005.

SUSTAINING – Environment and Sustainability Environmental management Maintain certification to the international environmental standard To be reviewed annually. ISO14001 in all operating businesses.

Environmental management Minimise negative impact on the environment. Zero enforcement notices by environmental agencies.

Air emissions Seek to lower levels of energy use. Reduce electricity consumption by five per cent in offices and call centres by 2007 and in our network by 2008. Air emissions Reduce transport fuel consumption and emissions. Reduce emissions associated with business transport by five per cent by March 2006. Resources Seek to lower the levels of energy use and to encourage uptake of energy Pilot renewable energy sourcing for at least two of our sites by 2006 and continue from renewable sources. to keep up renewable energy sourcing above 10 per cent. Resources Increase number of mobile phones and materials recycled. Collect at least 150,000 redundant mobile handsets and ensure they are recycled by March 2006. Climate change Minimise negative impact on the environment. Complete a study of O2’s carbon emissions and establish emission targets by March 2006.

BALANCING – Workplace Health and safety management Zero tolerance of accidents in the workplace. Zero enforcement notices by health and safety authorities.

Employee engagement We are committed to further increasing employee engagement. Achieve Group-wide Reflect O2 target and response rate of 73 per cent.

Health and Wellbeing Increase our people’s awareness of general health and wellbeing. Invest in programmes to improve health and wellbeing to help the Company as an employer of choice. Disability Increase the opportunities to enable disabled people to work at O2. Target campaigns in relevant business units and functions to encourage applications from disabled people.

INVOLVING – Community Community investment Measure the impact of work in the community to ensure our investment Measure the impact of our community involvement by a grant monitoring process is delivering benefits to society and the Company. that includes third-party assessment of any significant project or a project above the value of £5,000. Employee involvement Encourage employees to take part in our community Increase uptake of Can Do Giving (charitable payroll giving in the UK) to five per involvement activities. cent (from 4.3 per cent) by 2006. Increase Can Do Matching participation to include 150 employees and contributions to a total of £150,000.

www.o2.com/cr/report2005/targets 41 Report assurance statement

To the Management of O2 plc The operating businesses visited were: 5. Testing statements made in the Report We have been asked to review O2 plc’s (O2) regarding O2’s corporate responsibility 2005 Corporate Responsibility Report (the • Airwave performance by reviewing evidence Report) in order to provide assurance on its • O2 UK provided by O2. This excluded all contents. O2 is responsible for the collection • Manx Telecom statements made throughout the and presentation of information within report regarding O2’s community 3. Testing the scope and balance of the the Report. investment activities and testing the information contained in the Report commentary provided in the GRI Content against: Our responsibility in performing this work is to Index provided on O2’s website. the management of O2 only and in accordance • Internal documents such as Board papers, with the terms of reference agreed with them. Level of assurance Executive Committee papers and Corporate We do not therefore accept or assume any There are currently no final guidelines Responsibility Forum minutes and papers. responsibility for any other purpose or to any from AccountAbility on agreed definitions for • A selection of external media sources other person or organisation. Any reliance any levels of assurance when using the AA1000 relating to O2’s management of corporate such third party may place on the Report is Assurance Standard. We planned and responsibility issues. entirely at its own risk. performed our review to obtain information • Outputs of internal and external and explanations that we considered stakeholder engagement on O2’s What we did to form our conclusions necessary to form the conclusions on corporate responsibility performance and on There are currently no statutory requirements the Report against each of the AA1000 the 2004 Corporate Responsibility Report. in the UK in relation to the independent Assurance Standard’s assurance principles • Outputs of a 2005 review of O2’s review of corporate responsibility reports. (materiality, completeness and responsiveness) stakeholder dialogue activities The AccountAbility AA1000 Assurance within the terms of reference agreed with conducted by an external agency. Standard sets out principles for social and O2 management. environmental report assurance and we have 4. Review of the Report as to whether it been asked by O2 to set out our conclusions The limitations of our review is in accordance with the GRI 2002 by reference to the assurance principles Our review did not include: Sustainability Reporting Guidelines. described in the AA1000 Assurance Standard. We assessed whether the report: • Testing the processes for gathering or We have also reviewed the Report against reporting the various data presented in the a) Contains all information required in whether in our opinion the Report is in Report. Therefore, we provide no assurance Sections 1-3 of Part C of the GRI accordance with the Global Reporting on the completeness, quality and accuracy guidelines (Vision and Strategy; Profile; Initiative’s 2002 Sustainability Reporting of the data included in the Report. and Governance Structure and Guidelines (GRI). • Conducting stakeholder dialogue activities. Management Systems). Therefore, our conclusions on materiality Our review consisted of the activities b) Contains a GRI content index. and responsiveness are based on the review outlined below: of outputs of stakeholder dialogue provided c) Contains information regarding to us by O2. 1. Interviews with a selection of O2 performance against each of the • Testing the scope of the Report against management and functional staff at O2 GRI core indicators or explanations issues reported on by O2’s peers. plc headquarters in Slough to understand for their omission. • Testing statements made throughout the the current status of corporate responsibility Report (including the five operating activities and progress made during the d) Is consistent with the 11 principles business reports) regarding O2’s community reporting period. by reviewing O2’s own assessment investment activities, nor testing the of these principles. 2. Visits to selected O2 operating accuracy of the references to the BITC reporting guidelines. businesses to review the systems and e) Contains a statement signed by the • Testing the commentary provided in the GRI processes in place for managing and Board or the CEO confirming that the Content Index provided on O2’s website. reporting corporate responsibility issues Report has been prepared in accordance and to review evidence in support of with GRI. claims made in the Report regarding O2’s corporate responsibility performance.

42 www.o2.com/cr/report2005/assurance Our conclusions Responsiveness Based on the scope of our review our Has O2 responded to stakeholder concerns? conclusions are outlined below: • We consider that the Report’s scope and Materiality content addresses issues expressed in the Has O2 provided a balanced representation stakeholder dialogue outputs provided to of material issues concerning O2’s corporate us by O2. responsibility performance? • O2 has developed a method to track the identification, management and mitigation • The Report provides a balanced of corporate responsibility issues in response representation of material aspects to stakeholder dialogue. We understand concerning O2’s corporate responsibility from O2, that this method will be performance. implemented in the financial year 2005/06 • O2 has undertaken a series of research and it has therefore not been included in activities which have informed the selection our review. of issues reported. O2 has also developed • We have observed policies, programmes a process for determining material issues, and discrete activities aimed at addressing a as described under ‘What We Report On’ range of issues raised through stakeholder in the ‘Engaging’ section of the Report. dialogue. It is recognised that the response We understand from O2 that this process is based on O2’s judgement. will be used in determining the content of future corporate responsibility reports. Has the Report been prepared in • The Report covers the core GRI indicators accordance with the GRI? or explains the reasons for any omissions. Based on our review we consider that the report has been prepared in accordance Completeness with the GRI 2002 Sustainability Reporting Does O2 have complete information on which Guidelines. to base a judgement of what is material for inclusion in the Report? Areas of progress since 2003 and areas for improvement • We are not aware of any material issues Our observations regarding progress made excluded or misstatements made in relation since 2003 and areas for improvement will be to the information provided to the addressed in our report to O2 management. Corporate Responsibility Forum on which judgements are made in respect of progress Our independence against corporate responsibility and the This is the third year Ernst & Young LLP have content of the Report. provided independent assurance services in • The processes for reporting progress in relation to O2’s corporate responsibility corporate responsibility activities in each of reporting. With the exception of this work, the operating businesses have been revised. we have provided no other services relating Corporate responsibility reports are now to O2’s approach to corporate responsibility provided by the CR Forum to the O2 or any of the business processes relating to Executive Committee each quarter for the management of the issues discussed in review. However, the corporate responsibility the Report. key performance indicators have yet to be implemented against which each operating Our assurance team business will report progress. Our assurance team has been drawn from our • We have tested claims and statements UK corporate responsibility team. All members made in the Report regarding O2’s of the team are experienced in social, ethical corporate responsibility performance by and environmental assurance having worked obtaining supporting evidence from O2. on similar engagements for a number of significant UK and international businesses.

Ernst & Young LLP London, 24 June 2005

www.o2.com/cr/report2005/assurance 43 Cautionary statement regarding The information on our website, any website forward-looking statements mentioned in this document or any website This document contains certain forward- directly or indirectly linked to our or any other looking statements. We may also make website mentioned in this document is not written or oral forward-looking statements in: incorporated by reference into this document and you should not rely on it. • our periodic reports to the US Securities and Exchange Commission, also known Third party trademarks as the SEC, on Forms 20-F and 6-K; Third parties’ trademarks used in this • our annual report and accounts and half- document remain the property of the third yearly reports; party concerned. • our press releases and other written materials; and • oral statements made by our officers, directors or employees to third parties.

We have based these forward-looking statements on our current plans, 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.

Statements that are not historical facts, including statements about our beliefs and expectations are forward-looking statements. Words like ‘believe’, ‘anticipate’, ‘expect’, ‘intend’, ‘seek’, ‘will’, ‘plan’, ‘could’, ‘may’, Design and production: Corporate Edge ‘might’, ‘project’, ‘goal’, ‘target’ and similar expressions often identify forward-looking statements but are not the only ways we Writing and research: Simon Beavis and Lynn Beavis identify these statements. The print production of this report is Carbon Neutral®. These statements may be found in this document generally. Our actual results could Printed by Westerham Press. The printer holds FSC Chain of differ materially from those anticipated in Custody (Certificate number SGS-COC-1732). Printed using these forward-looking statements as a result vegetable-based inks. The printer is registered to environmental of various factors. management system ISO 14001. On average over 84% of any If any one or more of the foregoing waste associated with this product will be recycled. assumptions are ultimately incorrect, our actual results may differ from our expectations The paper is printed on Revive Special Silk. At least 30% of based on these assumptions. Also, the sector the total fibre content comes from well-managed forests and markets in which we operate may not independently certified according to the rules of the Forest grow over the next several years as expected, Stewardship Council, and 30% is from post-consumer recycled or at all. The failure of these markets to grow as expected may have a material adverse waste paper. effect on our business, operating results and financial condition and the market price of FSC Trademark© 1996 Forest Stewardship Council A.C. our ordinary shares.

44 www.o2.com/cr/report2005/assurance Web www.o2.com/cr/report2005

Email [email protected]

Telephone +44 (0)113 272 2000

Address O2 plc Legal and Corporate Affairs Corporate Responsibility Wellington Street Slough Berkshire SL1 1YP UK

Registered no. 5310128