BT 2005 Annual Report Download - page 45

Corporate social responsibility (CSR)
Managing social, ethical and environmental issues in a
way that grows shareholder value and helps BT and our
customers to be more sustainable is a key challenge for us.
The Dow Jones Sustainability Indexes rank companies
for their success in managing social, ethical and
environmental factors for competitive advantage. During
the 2005 financial year, BT was ranked as the top
telecommunications company in the Dow Jones
Sustainability Index for the fourth year in a row.
We also hold the Queen’s Award for Enterprise in
recognition of our contribution to sustainable
development.
This section of the report, together with the broad
statement on social, environmental and ethical matters
included in the section on Corporate governance,
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, which has been prepared in
accordance with the 2002 Global Reporting Initiative
(GRI) sustainability reporting guidelines.
CSR governance
The Board reviews our CSR strategy and performance
annually and is kept informed of our main CSR risks and
opportunities as well as 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, two non-executive directors and two external
independent members, who have a reputation for
excellence in this field.
An executive committee, the Corporate Social
Responsibility Steering Group (CSRSG), oversees the
implementation of our CSR strategy and programme. This
includes risk assessment, target and objective setting,
ISO 14001 certification – the international standard for
environmental management systems – and public
accountability.
The CSRSG consists of CSR champions nominated by
the lines of business and seven support functions (human
resources, corporate governance, health and safety, group
property, communications, internal audit and
procurement).
The CSRSG is chaired by BT’s CSR champion, Alison
Ritchie, Chief Broadband Officer and a member of the
Operating Committee. It is supported by advice from an
independent panel of CSR experts.
Embedding CSR into BT’s commercial operations is an
important part of our CSR strategy, and a key part of our
work in the 2005 financial year has been extending our
CSR activity into our global operations. We have carried
out a number of ‘health checks’ in our commercial
operations to identify specific social, economic and
environmental impacts (positive and negative) and
particular CSR risks and opportunities. A report is then
compiled which includes recommended actions.
We have important relationships with a wide range of
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.
Our CSR team co-ordinates and monitors CSR
performance, identifies potential issues and opportunities
that might affect the business, and supports BT’s
commercial activities.
As part of our CSR performance measurement, we
have 12 non-financial KPIs (key performance indicators)
which provide a comprehensive overview of BT’s social
and environmental performance. Our performance against
these is published in our annual Social and Environmental
report.
Social, environmental and ethical risks
During the 2005 financial year, we further increased our
understanding of our CSR risks. Privacy has been
identified as an additional risk and we have developed a
set of privacy principles for the business and
commissioned research on the topic of privacy in the
digital networked economy.
In the context of CSR, our most significant risks are:
&supply chain working conditions;
&health and safety;
&climate change;
&diversity;
&offshoring or the ‘geography of jobs’;
&breach of the code of business ethics; and
&privacy.
Each of these risks has a risk owner and mitigation
strategy in place (more detail on these can be found in
our online social and environmental report).
CSR business opportunities
There is a direct link between our CSR activity, corporate
reputation and customer satisfaction. A detailed analysis
in 2001 of customer opinion data based on tens of
thousands of interviews showed that a 1% improvement
in the public’s perception of our CSR activities resulted in
a 0.1% increase in our retail customer satisfaction figures.
This underlines how important it is not only to protect
our reputation through appropriate risk management
activities, but also to enhance it through our community
activities.
Long-term sustainability trends are creating market
opportunities for us, such as the use 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
2005 financial year, bids to the value of £2.2 billion
required us to demonstrate expertise in managing these
issues.
Environment
During the 2005 financial year, we retained ISO 14001
accreditation for our UK operations and BT Spain and
extended it to BT Ireland.
BT is one of the largest consumers of industrial and
commercial electricity in the UK, and the growth of
broadband has, as expected, increased our electricity use.
In the 2005 financial year, our usage increased by 3.1%.
However, we also signed the world’s largest green energy
contract which means that almost all of BT’s UK
electricity needs will be met from environmentally-friendly
Our commitment to society
44 BT Group plc Annual Report and Form 20-F 2005 Operating and financial review