Analyst round table: Sustainability 6 October 2011

Analyst round table: Sustainability 6 October 2011

© British Telecommunications plc

Agenda

1. Welcome & introduction

• Niall Dunne, chief sustainability officer

2. Energy & carbon reduction

• Richard Tarboton, director of energy & carbon

3. Supply chain

• Liz Cross, CSR & governance for procurement

4. Carbon footprinting & driving industry standards

• Gabrielle Giner, environmental sustainability programme manager

5. Global Services Sustainability Practice & case study

• Simon O’Neill, market strategy & development

6. The age of smart


7. Q&A panel session

2


3

A better future


Agenda





3. Supply chain






6. The age of smart



4


A massive transformationThe move to a low carbon economy will be as impactful as the industrial revolution

International aviation& shipping*

UK non-CO2 GHGs

Other CO2

Industry (heat &industrial processes)

Residential &Commercial heat

Domestic transport

Electricity Generation

695 Mt CO2e

159 Mt CO2e

77% cut(=80% vs. 1990)

184

134

103

108

98

42

* Bunker fuels basis


BT Energy reduction to dateOver the last two years, BT has reversed the trend of increasing energy

consumption, despite an ever increasing explosion in digital services

* Bunker fuels basis


Network growth is driving up consumption, but our energy programmes are reducing consumption at a faster rate enabling net year on year reduction.

Network72%

Data Centres

10%

Estates18%

2,225,626 MWh p.a.

Breakdown of electricity use

1) Networks

2) Data Centres

3) Property

BT is delivering energy reductions and efficiencies in:

2,400

2,600

2,800

3,000

3,200

09/10 10/11 11/12 12/13

Ener

gy in

GW

h pa

BT's Global Energy ConsumptionStatus: August 2011

Growth

Trend

Target

-2.2%vs 09/10

+12% vs 09/10(growth)

TARGET

+3.0%vs 09/10

+4.6%vs 10/11

-2.6%vs 10/11 Re

ducti

on o

f£5

6m p

a76

0 GW

hpa

BT’s global energy consumption going forward


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


BT is setting up a Smart Energy Control system to monitor and optimise energy consumption

BMS450 people sites

BMS450 people sites

BMS1,700 operational sites

BMS1,700 operational sites

Smart Metering22,000 installed across 6,000 sites

Smart Metering22,000 installed across 6,000 sites

Energy Control Centre

Energy Control Centre Field

EngineeringField

EngineeringFacility

ManagementFacility

Management

Analyse data

Optimiseremotely

Tasks &Issues

Optimiselocally

Optimiselocally

Tasks &Issues

BT’s Integrated Energy Management System


1. Energy distribution, transparency and control

NetworkCarrier

EnergySupplier

HubHub

SmartMeter

Micro-generation

In-home display

Energy Management Services via TV

Energy Management online

Electricity

Gas

Data Centre

The Future


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3. Supply chain






6. The age of smart



11


Emerging lessons on best practice – BT

1. Emissions reductions must be driven from the very top of the organisation

2. Effective two-way communication is key to achieving behavioural change

3. Many carbon reduction projects save money and this is often the dominant driver

4. You can’t manage what you can’t measure

5. External carbon reporting is often driven by reputational or regulatory considerationsInte

rnal

fo

cus

Ext

ern

al f

ocu

s

6. Companies are increasingly feeling compelled to look across the value chain,but often for different reasons

7. Large customers can help improve their suppliers’ environmental performance

8. Many companies engage with their suppliers on environmental issues, butthe engagement is often ineffective and inefficient

9. Most suppliers see clear benefits of helping customers reduce theirenvironmental impact

10. Best practice is often not widely known, but there is ongoing work in someindustries to develop standards and guidelines


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


Supporting suppliers

• Free supplier workshops in partnership with The Carbon Trust

• Online resources

• Best practice webinars


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


Our supplier’s climate change commitments

70%

60%

50%

40%

30%

20%

10%

0%2007/8 2008/9 2009/10 2010/11

Policy on climate change

Monitor CO2 emissions

Targets in place

Source: Annual BT Supplier Survey


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


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3. Supply chain






6. The age of smart



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BT’s pioneering carbon footprinting methodology

Carbon footprinting elements

Customer Domain Service Platform Operational Activities

In-use GHG emissions associated with ICT end-user / customer premises equipment

eca

db f

In-use GHG emissions associated with ICT network and service platform supporting / connecting (but not in) customer domain

In-use GHG emissions associated with labor and non-ICT infrastructure supporting Customer Domain and Service Platform equipment

Embodied GHG emissions associated with Customer Domain equipment / infrastructure

Embodied GHG emissions associated with Service Platform equipment / infrastructure

Embodied GHG emissions associated with Operational / non-ICT capital infrastructure


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


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


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


Agenda





3. Supply chain






6. The age of smart



23


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

Sustainability & our customers

Sir Michael Rake

Chairman

Ian Livingston

Chief Executive

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“

“


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


Carbon Impact Assessment & Build a Sustainable Organisation

Quick re-cap from last year...

...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


Implementation

Planning

Assessment

Monitoring

Build a Sustainable Organisation

SustainabilityConsulting

Wellbeing

Healthcare

Community

Energy Management

Building Energy

Management

Smart Grids

Smart Meters

Transport & Supply Chain

Transport Efficiency

AssetManagement

DataCentres

Virtual DataCentre

Services

Managed Hosting

Continuous MigrationPractice

CRM

Contact Centre

Efficiency

Next Generation

ContactCentre

Smart Customer

Interactions

IT Services

Operational Efficiency

Integrating Network & IT services

Professional Services (IT Audit)

Workforce

Flexible Workforce

Unified Comms

Mobility Solutions

Field ForceAutomation


Case studiesWe continue to generate revenue through our Build a Sustainable Organisation Portfolio and helping our customers understand the sustainable benefits we can deliver for them

• Virtual Data Centre Services

• 600 physical servers reduced to 160 virtual and 130 physical

• 170 desktops virtualised

• Estimated 680 t CO2 emissions reduction

• Significant increase in business resilience

Caja Navarra Bank

• 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

2010/11


i. 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

ii. 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

iii. Environment Agency

• Greenest Contract in UK Government

• Targets with Teeth• 3 Sustainability Gates• Power Consumption• Travel Reduction• Sweating Assets to give

longer life

• 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

Continue to work with Unilever to support their sustainable objectives through investigating opportunities such as:

•Asset Management (RFID)•Building Energy Management Systems•Transport Efficiency

Sustainable partnerships with customers

+ N3 = Sustainability

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

Supporting Unilever’s Sustainable Living Plan


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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


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)


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


Smart cities

•Wireless

•Fibre telecomms

•Remote sensor

•Machine-to-machine

•Cloud services

•Conferencing

•Web technologies

Our existing network means we’re ideally placed to help cities become smarter:


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


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


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3. Supply chain






6. The age of smart



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Documents

Analyst round table: Sustainability 6 October 2011