BT 2003 Annual Report Download - page 25

24 BT Annual Report and Form 20-F 2003
Investors are paying increasing attention to the ways
in which social, environmental and ethical issues are
managed to both preserve and grow shareholder value.
For example, the Dow Jones sustainability indexes
rank companies for their success in managing those
factors for competitive advantage. During the 2003
financial year, BT was ranked as the top
telecommunications company in the Dow Jones
Sustainability Index for the second year running.
We also won the Queen’s Award for Enterprise
in recognition of our contribution to sustainable
development.
A further manifestation of investor interest is the
Association of British Insurers’ disclosure guidelines
covering social, environmental and ethical risks and
opportunities.
BT’s top-level response to those guidelines is
provided in the section on Corporate governance,
with further information provided here.
Other parts of this report cover business integrity,
corporate governance and employee issues, such as
diversity and health and safety. This section
concentrates on CSR (corporate social responsibility)
governance, CSR risks, digital inclusion, environment,
community and business opportunities.
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.
Corporate social responsibility governance
A Board committee – the Community Support
Committee – oversees social investment expenditure
and establishes the strategy for maximising our
contribution to society. The committee, chaired by
Sir Christopher Bland, consists of representatives from
BT businesses, two non-executive directors and two
external independent members, who have a reputation
for excellence in this field.
An internal committee, known as the Corporate
Social Responsibility Steering Group, oversees the
implementation of our CSR programme. This includes
risk assessment, performance management, public
accountability, ISO14001 certification – the
international standard for environmental management
systems – and objective setting and control. The
steering group, which makes regular reports to
the Board, is chaired by a member of the
Operating Committee.
During 2003 the steering group agreed an action
plan to ensure that BT’s CSR activities help deliver the
BT strategy and established a set of non-financial key
performance indicators to provide an overview of BT’s
social and environmental performance. The steering
group also approved an accompanying set of targets
for the 2004 financial year.
BT takes quality very seriously and is fully
accredited to ISO9001.
To ensure that CSR is embedded into BT’s
commercial operations we have commenced a
series of CSR ‘‘health checks’’ of our main
commercial initiatives.
These health checks identify specific social, economic
and environmental impacts (both positive and negative)
and particular CSR risks and opportunities. A report is
then compiled, including recommended actions.
In addition, social, ethical and environmental
matters have been incorporated into the directors’
induction programme.
We have important relationships with a wide range
of different stakeholders, including employees,
customers and suppliers. We engage with these
stakeholders in a number of ways, including consumer
liaison panels, an annual employee survey and a
supplier relationship management programme.
We also employ a number of CSR experts who
investigate long-term societal trends, identify potential
issues that might affect the business and support BT’s
commercial activities.
Finally, our social and environmental report
has been brought into accordance with the 2002
Global Reporting Initiative guidelines and received
a commendation in the 2002 Association of
Chartered Certified Accountants (ACCA) Sustainability
Reporting Awards.
Social, environmental and ethical risks
Currently, we identify no social, environmental or
ethical risks that would have a material impact on
our business.
However, we have identified the issue of supply
chain working conditions as posing a potential risk to
our reputation. In order to address this potential risk,
we have introduced our Sourcing with Human Dignity
programme – a collaborative undertaking seeking the
active support of all our relevant suppliers.
By 31 March 2003, 16 key suppliers (79% of those
targeted) had signed an agreement with BT giving their
written support concerning ethical trading.
Over the past two years, 16 initial on-site
assessments and seven re-visits have been undertaken
in industry sectors where we believe the risk of falling
short of our Sourcing with Human Dignity standard
is at its highest.
BT’s certification to ISO14001 includes an
environmental risk assessment process and the bulk
storage of diesel fuel for use in back-up generators
at telephone exchanges has been identified as our
only significant environmental risk.
Although there are a small number of BT sites
where ground remediation is taking place, the cost is
not material and so we declare no material contingent
environmental liability in our financial statements. In
order to minimise any future liability in this area, we
are undertaking an £18 million programme to cover
tank testing, enhanced maintenance scheduling and
remedial works.
Digital inclusion
The digital divide is a key public policy issue and we
are working together with the UK Government and
the voluntary sector to find effective ways to use
communications technology to tackle social exclusion.
Our commitment to society