Changing world: Sustained values 2007 BT’s sustainability opportunities, challenges and performance Introduction Enhanced communications – enabled by advanced technology – are supporting rapid globalisation and economic growth. Virtual markets, electronic commerce, broadband and mobile telecommunications are transforming the way companies and people communicate and do business. 2007 Performance summary Commercial relationships are now conducted As one of the world’s oldest communications on an increasingly global scale where the companies, and an increasingly global significance of time and place is diminished. operator, we see opportunities to maximise increase in customer This is taking place in the context of a our positive contribution to society and in 3% satisfaction new world order. The power of emerging this way build the foundations for long-term markets – especially the rise of China business success. This attitude is at the core and India as industrial powerhouses of our corporate social responsibility (CSR) employee engagement – is redefining the global economic map. strategy. Our ultimate goal is to use enhanced 65% index Regional conflicts continue to flare and communications and technology to help destabilise world security. Sub-Saharan create a better, more sustainable world. Africa is ravaged by the pandemic of AIDS, Our CSR strategy is to build on the strong ethics performance measure further undermining its ability to compete in foundations we have established for 84% global markets. And the natural environment responsible business and to help meet the endures unprecedented stress from human challenge of three pressing global issues: reduction in UK CO2 development, in the form of climate change climate change; promoting a more inclusive 60% emissions since 1996 and loss of biodiversity. society; and enabling sustainable economic growth. The following pages show how we are implementing our strategy. 42% of UK waste recycled risk assessments carried 413 out with suppliers £21.8m community investment Contents 1 About this report 2 An interview with BT’s Chairman 3 Chief Executive’s statement 4 Group overview 6 Key themes 14 Our materiality process 15 Business case, risks and opportunities 16 Key performance indicators and targets 17 Assurance 17 Leadership Panel statement About this report Last year we began to tell the story of how BT is transforming its business to take advantage of rapid technological change. We showed how we manage the social and environmental implications of this transformation. This report reflects our sharpening focus on the economic implications of sustainable development, hence our decision to call this a Sustainability Report. Focusing on issues Assurance Our values On the following pages we look in greater This report has been assured by Lloyd’s depth at the opportunities generated by Register Quality Assurance (LRQA) against change, while exploring some of the many the AA1000 Assurance Standard. On Trustworthy challenges we face. We explain our strategy page 17 we include extracts from LRQA’s to maximise BT’s positive contribution to assurance statement and an independent Helpful society – through the way we operate and comment from BT’s CSR Leadership Panel. our products and services – and how this will support BT’s longer term business success. Regulatory compliance Inspiring We concentrate on the issues that are In the 2006 financial year, significant most significant and relevant to BT and our regulatory changes came into force Straightforward stakeholders. These have been identified following the UK communications industry through a formal process that analyses regulator Ofcom’s strategic review of Heart stakeholder and societal interest as well as BT’s telecommunications and its acceptance of BT’s policy position and the financial implications volunteered legally binding Undertakings. of each issue for BT, see page 14. This report BT established the Equality of Access Board We are committed to contributing positively is not intended to be a complete account (EAB), a Board committee with a majority to society and to a sustainable future. This is of our performance in 2006/07 – our full of independent members, responsible for part of the heart of BT. Sustainability Report is available at monitoring and reporting on compliance with www.bt.com/betterworld the Undertakings. The EAB has published its second annual report, which forms a distinct Leadership Panel part of BT’s regulatory compliance report. Our CSR Leadership Panel – a group of This is available on our website. external experts – advises on our strategy and scrutinises our performance. We have included views from panel members in this report. Our sustainability initiatives are not managed in isolation but increasingly integrated into the heart of our commercial business. This report includes perspectives from key people in our business who discuss our plans to capitalise on opportunities and respond to new challenges. Our full Sustainability Report is available at www.bt.com/betterworld Changing world: Sustained values 1 An interview with BT’s Chairman The business case for sustainability Jonathon Porrit, Founder Director of Forum for the Future and Chairman of BT’s CSR Leadership Panel, spoke with Sir Christopher Bland for this report. This is an edited extract from their conversation, which is available as a podcast on www.bt.com/betterworld Sir Christopher Bland JP: If you look back over your time as JP: Do you think the BT Board sees this as Chairman Chairman, which of the many sustainable a rising curve and is constantly thinking development actions by BT are you about its own role in the company? Do you particularly proud of? think it is always looking to the next six months, the next year out? SCB: There are two. We have topped the Dow Jones Sustainability Index for six SCB: Yes, I think it is. Sustainable successive years among telecommunications development is not the only thing that the companies. That is an external measure Board thinks about and it is not on every of sustainability I am really proud of. The single agenda, but it is high on its list of second thing is that we negotiated what priorities. was then the world’s biggest green energy contract in 2004 and we have just renewed that until 2010. That was a pioneering act There is a growing at the time. business imperative about JP: Where do you think the sustainable sustainable development development agenda is going? Some business people see it as having been quite I think the other thing that is happening is a steep curve and now plateauing; others that there is a growing business imperative Jonathon Porritt think that it is a permanently rising curve about sustainable development, for two in terms of expectation and legislation. reasons: customers expect it and companies Chair of BT’s CSR Leadership Panel that do not pay attention to what their SCB: I think it is a permanently rising curve customers expect will suffer. Secondly, in expectation, not necessarily legislation. there are business opportunities out there Certainly, our customers and our staff expect for BT which mean that we can both do more of the company today than they did good and be profitable. I think our work on 20 years ago. Ten years ago it was not that teleconferencing is an example of where something that accelerates sustainable Our customers and our development is also one of our fastest growing businesses. That changes and staff expect more of the accelerates the interest of even the most company today than they commercially minded of boards. did 20 years ago high up the agenda of most companies – now everyone knows what you are talking about. Not only that, but I think the days of paying lip service to it are over. Pressure to perform, both internally generated and external, will increase. 2 Changing world: Sustained values Chief Executive’s statement Determined to make a difference Our business is changing. Rapidly. Technology and the information and communications technology (ICT) industry are playing a pivotal role in globalisation, bringing people closer together, providing ever-greater access to information and enabling businesses to operate in radically different ways. BT is now a global company, serving We have a dual focus for the future. First, we Ben Verwaayen customers wherever they are. We source will build on the foundations of our long- Chief Executive products, services and expertise world- standing commitment to be a responsible wide to make sure that we tap into the best business. This includes continuing to make practice available anywhere. Encouraging a positive contribution to the communities diversity of talent, cultures and ideas is where we operate through our community critical to our success. We are accelerating investment; prioritising the health and safety the transformation of our company to of our employees; and ensuring our business become more agile and responsive to activities around the world are conducted customer needs. with the highest integrity. Today there is an increased focus on the role of business in society. Stakeholders (including customers, governments and We remain determined employees) want to know what companies to make a difference – are doing to tackle big global challenges such as climate change. globally, locally, personally, corporately Today there is an increased focus on the Second, we are stepping up our actions to help tackle three pressing global challenges role of business in society. where our industry can make a difference: Stakeholders want to climate change; promoting a more inclusive society; and enabling sustainable economic know what companies growth. As part of my personal commitment are doing to tackle big to our CSR activities, it is my privilege to lead the Confederation of British Industry’s Task global challenges such as Force on Climate Change, which will report climate change later this year. We remain determined to make a difference – globally, locally, personally, I am convinced that we get a business corporately.