BT 2006 Annual Report Download - page 21

purpose, properties consist chieflyofoffices, depots and
computer centres.
We anticipate that our changing working patterns will
continue to reduce property costs.
OUR COMMITMENT TO SOCIETY
Corporate social responsibility
Managing social, ethical and environmental issues in a way that
grows shareholder value and helps BT and our customers be
more sustainable is very important to us.
The Dow Jones Sustainability Indexes rank companies for
their success in managing social, ethical and environmental
factors for competitive advantage. During the 2006 financial
year, BT was ranked as the top telecommunications company in
the Dow Jones Sustainability Index for the fifth year in a row.
We also hold the Queen’s Award for Enterprise in
recognition of our contribution to sustainable development and
we were ranked equal 4th in Business in the Community’s 2005
Corporate Responsibility Index.
This section of the report, together with the broad statement
on social, environmental and ethical matters included in the
Report of the directors, provides information in response to
the Association of British Insurers’ disclosure guidelines on
social responsibility.
More detailed disclosures on BT’s implementation of social,
ethical and environmental policies and procedures are available
online in our independently-verified Social and Environmental
Report 2006 which has been prepared in accordance with the
2002 Global Reporting Initiative (GRI) sustainability reporting
guidelines and assured against the AA1000 Assurance
Standard.
CSR governance
The Board reviews our CSR strategy, performance and risks
annually and is kept informed of new developments that may
impact on its duties.
A Board committee – the Community Support Committee –
oversees community, charitable and arts expenditure and the
strategy for maximising our contribution to society. The
committee, chaired by Sir Christopher Bland, consists of
representatives from BT businesses, three non-executive
directors and two independent members who have a reputation
for excellence in this field.
An executive committee, the Corporate Social Responsibility
Steering Group, oversees the implementation of our CSR
strategy and programme. This includes risk assessment, target
and objective setting and public accountability. BT also takes
advice from an independent panel of CSR experts.
During the 2006 financial year, our CSR strategy was
substantially revised and updated to focus on three principal
issues – climate change, sustainable economic growth and an
inclusive society. Embedding CSR into our commercial
operations remains an important part of our strategy. As part of
this process, we have carried out a number of ‘health checks’ in
our commercial operations to identify specific social,
environmental and ethical risks and opportunities.
We have important relationships with a wide range of
stakeholders around the globe, including employees, customers
and suppliers and engage with them in a number of different
ways.
As part of our CSR performance measurement, we have 12
CSR KPIs (key performance indicators) which cover our
relationships with our stakeholders, as well as our
environmental performance and our contribution to digital
inclusion and business integrity. Details of our performance
against these are published in our annual social and
environmental report.
Our CSR team co-ordinates and monitors CSR performance,
identifies potential issues and opportunities that could affect
the business and supports BT’s commercial activities.
Social, environmental and ethical risks
During the 2006 financial year, we further developed our
knowledge and understanding of our CSR risks. In the context
of CSR, our most significant risks continue to be:
sbreach of the code of business ethics
sclimate change
sdiversity
shealth and safety
soutsourcing
sprivacy
ssupply chain working conditions.
Each of these risks has an owner and mitigation strategy in
place (more detail on these risks can be found in our online
social and environmental report). These risks are not regarded
as material in relation to the BT group and, consequently, are
not included in Group risk factors.
CSR business opportunities
We have measured the link between customer satisfaction and
CSR performance for a number of years and our current
customer satisfaction models indicate a positive correlation.
Customers who believe that BT takes its responsibility to society
and the community seriously are more than twice as likely as
other customers to be ‘very’ or ‘extremely’ satisfied with BT.
Long-term sustainability trends are creating market
opportunities for us – the use, for example, of teleconferencing
and flexible working to reduce the need to travel and provide
more flexible lifestyles.
Increasingly, BT has to address social and environmental
matters when bidding for business. In the 2006 financial year,
bids to the value of £1.3 billion required us to demonstrate
expertise in managing these issues.
Procurement
Through our supply chain initiative, Sourcing with Human
Dignity, we seek to ensure that the working conditions in our
supply chain meet internationally recognised human rights
standards, and to investigate potential social and environmental
shortcomings. We monitor and set published targets for our
relationships with suppliers; in the 2006 financial year, for
example, 89% of suppliers were satisfied with their working
relationship with us.
Environment
During the 2006 financial year, we achieved re-certification
under the revised ISO 14001 standard – the international
standard for environmental management systems – for our
operations in the UK and Spain. We requested withdrawal of
our certification in Ireland, pending reorganisation and will seek
re-accreditation during the 2007 financial year.
Although BT is one of the largest consumers of industrial and
commercial electricity in the UK, and the growth of broadband
continues to increase our electricity use, our electricity
consumption increased by less than 1% in the 2006 financial
year. The green energy contract we signed in the 2005 financial
year means that almost all our UK electricity needs are met
from environmentally friendly sources, including wind
generation, solar, wave and hydroelectric schemes.
Operating and financial review BT Group plc Annual Report and Form 20-F 2006 19