Environmental performance

Focusing on continuous improvement

The future of the planet concerns many people. We want to make sure we responsibly manage our effects on the environment.

Over 50 per cent of respondents to the annual corporate responsibility survey of the British public put environmental protection high on their list of criteria for companies to support and 40 per cent of O2’s customers think that it is appropriate for O2 to support this area.¹

We work to improve our performance by setting targets for reducing our consumption of resources and our generation of emissions. We measure and record our progress through management reporting and we are reviewed externally as part of our registration to the international environmental management standard ISO 14001 and as part of our risk and insurance management programme.

O2 achieved a Group-wide certification to the international environmental management standard ISO 14001 ² in 2005.

Our suppliers are also expected to manage their environmental effects and, when appropriate, we measure them against our environmental procurement policy. Our ethical and environmental procurement policies have been approved by the O2 Board.

Targets and measurement

Our environmental policy specifies that we continuously need to improve our environmental performance. Each year we review our targets and measure our performance against them. We have made some progress in meeting our targets for 2005/06.

Progress against environmental targets
Area	Objectives and targets	Progress made	Status
Environmental management	Maintain Group-wide certification to the international environmental standard ISO 14001.	Certification has been retained (excluding O2 Ireland retail operations).	Achieved
Energy and CO2 emissions	Seek to lower levels of energy use. Reduce electricity consumption by 5 per cent in offices and call centres per FTE full-time employee by 2007 and in electricity per cell site by 2008.	Our overall electricity consumption is increasing because of our strong growth in sales. However, proportionate to the number of employees and base stations, our electricity consumption is decreasing in line with our stated targets. Electricity used by offices and call centres shows an 8 per cent decrease in electricity used per full-time employee. Electricity used by networks per base station has fallen by 4 per cent.	On target
Environmental management	Minimise negative impact on the environment. Zero enforcement notices by environmental agencies.	No enforcement notices were received during 2005/06.	Achieved
Air emissions	Reduce consumption of and emissions from transport fuel. Reduce emissions associated with business transport by 5 per cent by March 2006.	Our strong sales growth has increased our transport activities. We are also facing difficulty in getting robust mileage data for all our operations. However, several initiatives have been undertaken to reduce fuel consumption and associated emissions: O2 Germany subsidises public transport for employees; the Company has also fitted particle filters to new diesel-fuelled business cars where possible. O2 Ireland's new head office site was chosen because of its good transport links. Manx Telecom has changed part of its fleet of vehicles to those with lower emissions.	Failed
Resources	Seek to lower levels of energy use and to encourage uptake of energy from renewable sources. Pilot renewable energy sourcing for at least two of our sites by 2006 and continue to keep up renewable energy sourcing above 10 per cent.	O2 Germany has implemented a solar installation in Bavaria. In the UK, scoping studies have been performed to look at large-scale wind turbines on O2 UK sites. There are currently 4 trials running on LPG (battery) generators which use less fuel. A planned pilot for a wind turbine on the island of Eigg in the Scottish Isles was stopped in its later stages due to local objection. The uptake of electricity from renewable sources is 38 per cent.	Achieved
Resources	Increase number of mobile phones and materials recycled. Collect at least 150,000 redundant mobile handsets and ensure they are recycled by March 2006.	In 2005/06 O2 collected 335,777 phones for refurbishment and recycling. We also collected more than half a million used handsets in the UK alone, as part of our trade-in schemes for new handsets.	Achieved
Climate change	Minimise negative impact on the environment. Complete a study of O2's carbon emissions and establish emission targets by March 2006.	The assessment study has been completed and a detailed environmental vision - O2 Renew -with emission targets was approved by the O2 Executive Committee in early 2006.	Achieved

View our new environmental targets for 2006.

¹Survey conducted by MORI in November 2005.

^²Excluding O2 Ireland retail operations.

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