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Analyst round table: Sustainability

Analyst round table: Sustainability. 6 October 2011. Agenda. Welcome & introduction Niall Dunne, chief sustainability officer Energy & carbon reduction Richard Tarboton, director of energy & carbon Supply chain Liz Cross, CSR & governance for procurement

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Analyst round table: Sustainability

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  1. Analyst round table: Sustainability 6 October 2011

  2. Agenda • Welcome & introduction • Niall Dunne, chief sustainability officer • Energy & carbon reduction • Richard Tarboton, director of energy & carbon • Supply chain • Liz Cross, CSR & governance for procurement • Carbon footprinting & driving industry standards • Gabrielle Giner, environmental sustainability programme manager • Global Services Sustainability Practice & case study • Simon O’Neill, market strategy & development • The age of smart • Niall Dunne, chief sustainability officer • Q&A panel session 2

  3. A better future 3

  4. Agenda • Welcome & introduction • Niall Dunne, chief sustainability officer • Energy & carbon reduction • Richard Tarboton, director of energy & carbon • Supply chain • Liz Cross, CSR & governance for procurement • Carbon footprinting & driving industry standards • Gabrielle Giner, environmental sustainability programme manager • Global Services Sustainability Practice & case study • Simon O’Neill, market strategy & development • The age of smart • Niall Dunne, chief sustainability officer • Q&A panel session 4

  5. 695 Mt CO2e International aviation& shipping* 42 98 UK non-CO2 GHGs Other CO2 108 Industry (heat &industrial processes) 77% cut(=80% vs. 1990) 103 Residential &Commercial heat 134 Domestic transport 159 Mt CO2e 184 Electricity Generation A massive transformation The move to a low carbon economy will be as impactful as the industrial revolution * Bunker fuels basis

  6. BT Energy reduction to date Over the last two years, BT has reversed the trend of increasing energy consumption, despite an ever increasing explosion in digital services * Bunker fuels basis

  7. Network growth is driving up consumption, but our energy programmes are reducing consumption at a faster rate enabling net year on year reduction. BT’s global energy consumption going forward BT is delivering energy reductions and efficiencies in: Breakdown of electricity use

  8. Where are our energy savings coming from this year? 1. Smart energy control - £6.2m • 22,000 smart meters • 99% of UK electricity consumption and 65% of gas consumption • £17m invested generating £13m annual energy savings 2. Infrastructure rationalisation - £3.5m • Estate – reduction in office space • Data centers – virtualisation and switching off servers • Networks – migration and consolidation 3. Equipment replacement - £8.7m • Replacement of boilers, air conditioning, lights • Variable speed drives, fans 4. Employee engagement - £Priceless • Pan BT engagement • Energy champions

  9. BT’s Integrated Energy Management System BT is setting up a Smart Energy Control system to monitor and optimise energy consumption Tasks &Issues Tasks &Issues Energy Control Centre Field Engineering Facility Management Optimise locally Analyse data Optimise remotely Optimise locally BMS 450 people sites Smart Metering22,000 installed across 6,000 sites BMS 1,700 operational sites

  10. The Future 1. Energy distribution, transparency and control Micro-generation Data Centre Hub Energy Management online Network Carrier Smart Meter Electricity In-home display Energy Management Services via TV Energy Supplier Gas

  11. Agenda • Welcome & introduction • Niall Dunne, chief sustainability officer • Energy & carbon reduction • Richard Tarboton, director of energy & carbon • Supply chain • Liz Cross, CSR & governance for procurement • Carbon footprinting & driving industry standards • Gabrielle Giner, environmental sustainability programme manager • Global Services Sustainability Practice & case study • Simon O’Neill, market strategy & development • The age of smart • Niall Dunne, chief sustainability officer • Q&A panel session 11

  12. Emerging lessons on best practice – BT Emissions reductions must be driven from the very top of the organisation Effective two-way communication is key to achieving behavioural change Many carbon reduction projects save money and this is often the dominant driver You can’t manage what you can’t measure External carbon reporting is often driven by reputational or regulatory considerations Internal focus Companies are increasingly feeling compelled to look across the value chain,but often for different reasons Large customers can help improve their suppliers’ environmental performance Many companies engage with their suppliers on environmental issues, butthe engagement is often ineffective and inefficient Most suppliers see clear benefits of helping customers reduce theirenvironmental impact Best practice is often not widely known, but there is ongoing work in someindustries to develop standards and guidelines External focus

  13. BT Climate Change Procurement Standard • Launched March 2011 – one of the first of its kind in the UK • Encourages our suppliers to use energy efficiently and reduce carbon during the production, delivery, use and disposal of the products and services supplied to BT • Suppliers asked to: • Have policies in place to address the challenge of climate change • Measure and report emissions of carbon dioxide and other greenhouse gases • Set challenging targets to reduce emissions and report regularly on their progress

  14. Supporting suppliers • Free supplier workshops in partnership with The Carbon Trust • Online resources • Best practice webinars

  15. Procurement climate change targets 2011-12 85% of BT contracts placed will take energy consumption and / or environmental impact into consideration in the award of business. Tenders should include minimum 5% criteria on energy 1 100% of BT ‘product replacement contracts’ awarded will be able to demonstrate an improvement in energy efficiency and/or reduced environmental impact. 2 • Questionnaire & Energy calculation tool for buyers and suppliers • Climate Change Standard to be included in new contracts • 2010/11 Targets – P&SC achieved 80% and 100% 3

  16. Our supplier’s climate change commitments Policy on climate change Monitor CO2 emissions 70% Targets in place 60% 50% 40% 30% 20% 10% 0% 2007/8 2008/9 2009/10 2010/11 Source: Annual BT Supplier Survey

  17. Next steps • Target to embed into 80% of new contracts this year • Compliance with the standard identified via the climate change questionnaire in tenders • Feed-back, reactions and compliance being tracked • On-going communication with the procurement community and with buyers • Process of embedding with our buyers • Carbon Disclosure Project supply chain initiative is showing stronger engagement from our suppliers

  18. Agenda • Welcome & introduction • Niall Dunne, chief sustainability officer • Energy & carbon reduction • Richard Tarboton, director of energy & carbon • Supply chain • Liz Cross, CSR & governance for procurement • Carbon footprinting & driving industry standards • Gabrielle Giner, environmental sustainability programme manager • Global Services Sustainability Practice & case study • Simon O’Neill, market strategy & development • The age of smart • Niall Dunne, chief sustainability officer • Q&A panel session 18

  19. BT’s pioneering carbon footprinting methodology Carbon footprinting elements Customer Domain Service Platform Operational Activities GHG Emissions LCA Phase Use e c a In-use GHG emissions associated with labor and non-ICT infrastructure supporting Customer Domain and Service Platform equipment In-use GHG emissions associated with ICT network and service platform supporting / connecting (but not in) customer domain In-use GHG emissions associated with ICT end-user / customer premises equipment Embodied f b d Embodied GHG emissions associated with Service Platform equipment / infrastructure Embodied GHG emissions associated with Operational / non-ICT capital infrastructure Embodied GHG emissions associated with Customer Domain equipment / infrastructure

  20. World first: carbon footprinting for London 2012 Impact of use-phase and embodied emissions associated with BT’s London 2012 solution: • equipment dedicated to London 2012 • the contribution of BT’s shared network services which will carry Games traffic • BT people dedicated to the design, delivery and operation of the solution

  21. GHG Protocol ICT sector supplement • Result of BT developing methodology for our services and our experience in road testing draft product standard • “Practitioners Guide” • written by practitioners for practitioners • how to carbon footprint ICT products (goods & services) • ICT lifecycle and enabling effects [2% / 98%] • examples / case studies / supporting data • BT co-chairs telecommunications network services sub-group and is on steering committee

  22. Next steps • Continue to drive industry collaboration towards global agreement • Participation in European Commission pilot of methodologies • Publication target date for GHG Protocol ICT sector supplement: February 2012

  23. Agenda • Welcome & introduction • Niall Dunne, chief sustainability officer • Energy & carbon reduction • Richard Tarboton, director of energy & carbon • Supply chain • Liz Cross, CSR & governance for procurement • Carbon footprinting & driving industry standards • Gabrielle Giner, environmental sustainability programme manager • Global Services Sustainability Practice & case study • Simon O’Neill, market strategy & development • The age of smart • Niall Dunne, chief sustainability officer • Q&A panel session 23

  24. Sustainability & our customers Previously we ensured that sustainability activity with our customers was embedded into BT’s Climate Change Strategy Our CEO Ian Livingston has now added a 6th strategic priority for the business: Becoming ‘a responsible and sustainable business leader’ “ “ This means we need to continue to dedicate our efforts to helping our customers move to become more sustainable Our commitment to being a leader in responsible and sustainable business goes beyond a statement of strategic intent and beyond managing our own social and environmental footprint We’re also passionate about the role that BT can play in helping others to live and work more sustainably through our technology and the skills and expertise of our people “ “ Sir Michael Rake Chairman Ian Livingston Chief Executive

  25. How we make it happen Bid Responses • Support major bids where the solution to be delivered can have real sustainability benefits for the customer • Includes £305m of Global Services bids in H1 of 2011/12 • Sustainability also has a major role to play in joint BT-Local Authority Superfast Broadband bids Thought Leadership • Focus on understanding customer sustainability needs on a sectorised basis through engagement with account teams and customers • Producing documentation and customer material to articulate the sustainable benefits of ICT solutions • Focus in 2011/12 has been on the Public Sector as well as retail and supply chain

  26. Carbon Impact Assessment & Build a Sustainable Organisation ...This has been updated to include a more comprehensive picture of BT’s sustainable capabilities as well as providing supporting information for customers on the social, economic and environmental benefits of ICT for their business Quick re-cap from last year...

  27. Build a Sustainable Organisation Sustainability Consulting Operational Efficiency Integrating Network & IT services Professional Services (IT Audit) Contact Centre Efficiency Next Generation Contact Centre Smart Customer Interactions Virtual Data Centre Services Managed Hosting Continuous Migration Practice Transport Efficiency Asset Management Building Energy Management Smart Grids Smart Meters Healthcare Community Flexible Workforce Unified Comms Mobility Solutions Field Force Automation Data Centres Transport & Supply Chain Energy Management IT Services Workforce CRM Wellbeing Assessment Planning Implementation Monitoring

  28. Case studies We continue to generate revenue through our Build a Sustainable Organisation Portfolio and helping our customers understand the sustainable benefits we can deliver for them 2010/11 • 600 physical servers reduced to 160 virtual and 130 physical • 170 desktops virtualised • Estimated 680 t CO2 emissions reduction • Significant increase in business resilience • Virtual Data Centre Services • BT Building Energy Efficiency (Green Branch) • Internal rate of return of 11.7 % • Approximately £10,000 savings per branch per year • Average 25% reduction in KWh Caja Navarra Bank

  29. Sustainable partnerships with customers • The N3 team works closely with the NHS to find ways of utilising broadband to reduce emissions • West London Cancer Network utilises the N3 network to transform their organisation using video-conferencing • The Cornwall & Isles of Scilly Community of Interest Network uses N3 to link distant sites together to enable remote patient care • The Kent Cardiovascular Network uses N3 to send images in real time to specialists across London + N3 = Sustainability Supporting Unilever’s Sustainable Living Plan • As part of our contract re-sign we committed to creating and delivering on a joint Green IT Roadmap. • Collaborate with Unilever on embedding Green IT into service delivery. • Sustainability training is now mandatory for key staff working on the contract • Project Firefox • Key requirement was to measure the impact of the solution • Sustainability design principles developed to help guide Solution Architects • Sustainability governance built into the contract • Environment Agency • Greenest Contract in UK Government • Targets with Teeth • 3 Sustainability Gates • Power Consumption • Travel Reduction • Sweating Assets to give longer life  • Continue to work with Unilever to support their sustainable objectives through investigating opportunities such as: • Asset Management (RFID) • Building Energy Management Systems • Transport Efficiency • Unilever Resign • Bid submission included Sustainability consulting to create a joint Green IT Roadmap. • Collaborated with Unilever on embedding Green IT into service delivery. • New sales channel opened up • Sustainability training is now mandatory for key

  30. Agenda • Welcome & introduction • Niall Dunne, chief sustainability officer • Energy & carbon reduction • Richard Tarboton, director of energy & carbon • Supply chain • Liz Cross, CSR & governance for procurement • Carbon footprinting & driving industry standards • Gabrielle Giner, environmental sustainability programme manager • Global Services Sustainability Practice & case study • Simon O’Neill, market strategy & development • The age of smart • Niall Dunne, chief sustainability officer • Q&A panel session 30

  31. The future of business leadership • The new industrial revolution • Resource based • Winners & losers • The challenge • between now and 2020 every tonne of CO2 emitted needs to deliver 5 times the economic value Winners will succeed by: • aligning sustainability & innovation together • growing a top-line that resolves (as oppose to creates) humanities greatest challenges • behaving much more like a business eco-system: • better networks with customers & suppliers • cross industry collaboration to create scalable solutions that can serve the needs of 10bn+ people

  32. The future of business leadership The need for systemic change • more conscientious consumption models, in the home (M2M & SmartReach and/or Fibre) and at an individual level. • more scalable & resilient supply chains (RFID enabling transparency and traceability) enabling the eradication of waste & optimisation of resources. From supply chains to supply loops. • The innate social value of a more connected society (adapt, overcome & evolve)

  33. Cool broadband • Always available vs. always on • Lines automatically switch to low-power during low-traffic • Potential energy saving 30% per line card • No impact on service • Customer trials successful • Working with vendors on development plan

  34. Smart cities Our existing network means we’re ideally placed to help cities become smarter: • Wireless • Fibre telecomms • Remote sensor • Machine-to-machine • Cloud services • Conferencing • Web technologies

  35. Developing smart technologies • Helping to create low-carbon communities • Smart meters & smart grids • Real-time electricity, gas & water use • Better planning possible via Smart grid intelligence • SmartReach • BT part of consortium created to support governments commitment to roll our smart meters to 28 million homes & SMEs by 2020 • New, secure wireless network via long range radio waves • Smartgrid Ireland – founding partner • Smart Grid system in North America

  36. SmartReach trial activity • Ready trial launched in July 2010 • In part, DECC fund • Covers 80 sq. km and • 200,000 homes • Triallists exploring performance • of Smart energy & water meters. • SmartReach also engaged in • trials regarding Smart Grid & • demand management • applications

  37. Agenda • Welcome & introduction • Niall Dunne, chief sustainability officer • Energy & carbon reduction • Richard Tarboton, director of energy & carbon • Supply chain • Liz Cross, CSR & governance for procurement • Carbon footprinting & driving industry standards • Gabrielle Giner, environmental sustainability programme manager • Global Services Sustainability Practice & case study • Simon O’Neill, market strategy & development • The age of smart • Niall Dunne, chief sustainability officer • Q&A panel session 37

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