Better Future 1 Net Good Pathway to Carbon Net Positive

Better Future 2 Net Good ICT’s vast potential for carbon abatement © British Telecommunications plc ICT has the potential to enable the abatement of 9.1Gt CO2e per annum SMARTer 2020 report ICT could cut projected global GHG emissions by 16.5% $1.9tn in energy/fuel savings 7x the ICT sector emissions ICT potential first estimated by The Climate Group’s SMART 2020 report SMARTer 2020 report ICT could cut projected global GHG emissions by 16.5% $1.9tn in energy/fuel savings 7x the ICT sector emissions ICT potential first estimated by The Climate Group’s SMART 2020 report BT’s response Adopt the SMART 2020 strategy and continue to cut our own emissions and help our customers cut their emissions through our products & services BT’s response Adopt the SMART 2020 strategy and continue to cut our own emissions and help our customers cut their emissions through our products & services Response by ICT industry Improvements in energy efficiency Development of new products and services Response by ICT industry Improvements in energy efficiency Development of new products and services

Better Future 3 Net Good BT Net Good: Part of a wider business & sustainability strategy © British Telecommunications plc We’re focusing on integrating sustainability into everything we do. Our Better Future programme is our commitment to use the power of communication to improve lives and ways of doing business without costing the earth. We’re focusing on integrating sustainability into everything we do. Our Better Future programme is our commitment to use the power of communication to improve lives and ways of doing business without costing the earth. Better Future Being a responsible & sustainable business leader is one of BT’s six strategic priorities to grow the value of our business. Our strategyOur Programmes Net Good Connected Society Improving Lives

Better Future 4 Net Good 1992 BT measures corporate carbon footprint; sets first reduction target 2010 BT Road Tests GHG Protocol Product Standard 2008 BT sets global / UK CO2 reduction targets <80% Assessment of Scope 3 emissions BT supports development of GHG Protocol ICT Sector Guidance 2011 BT Carbon Footprint Home Hub, DECT phone & STB Achieves 3:1 Carbon Abatement Impact for Customers 2013 Sets 2020 Carbon Abatement Target 2020 Publication of Scope 3 supply chain emissions London 2012/ LOGOG telecoms service carbon footprint BT has already built a strong track record in carbon measurement & management © British Telecommunications plc

Better Future 5 Net Good Global resource challenges © British Telecommunications plc Our Net Good vision is to help society live within the constraints of our planet’s resources through our products and people Net Good vision

Better Future 6 Net Good Downstream (CPE) Own Operations Upstream (suppliers) BT Existing and future products and services BT Existing and future products and services 3 Abatement potential for customers 3 Abatement potential for customers 1 Carbon impact of BT’s business 1 Carbon impact of BT’s business : Our 2020 goal puts the Net Good vision into practice for our most material environmental impact: energy & carbon. It brings together all the components of our impact, and links revenue growth to carbon abatement. The :1 goal: Net Good vision into practice © British Telecommunications plc

Better Future 7 Net Good End to end carbon impact methodology © British Telecommunications plc Upstream reductions Own operations reductions Upstream/Supply chain (64%) Own operations (8%) Downstream (28%) Spend based Environmentally Extended Input-Output Analysis Measured actualsCalculated based on product volumes and consumption metrics

Better Future 8 Net Good X = Case Study Report Current Total carbon abatement Total carbon abatement Abatement Methodology © British Telecommunications plc Identify BT products/services with carbon abatement potential For each, develop unit carbon abatement metric based on a case study or report Assess total carbon abatement achieved through applying product volumes

Better Future 9 Net Good Abatement Pathway © British Telecommunications plc :1 1:1

Better Future 10 Better FutureNet Good BT’s approach Transparency Independent verification & endorsement Available to other businesses Engage stakeholders Learn from feedback Robust reporting on targets The 3:1 methodology: A transparent, open source approach © British Telecommunications plc

Better Future 11 Better FutureNet Good Ensuring robustness BT asked the Carbon Trust and Camanoe Associates (researchers from MIT) to endorse both the methodology and BT’s assumptions Ensuring robustness BT asked the Carbon Trust and Camanoe Associates (researchers from MIT) to endorse both the methodology and BT’s assumptions Endorsement Carbon Trust and Camanoe Associates reviewed the Scope 1,2 & 3 measurement approach and the approach to measuring carbon abatement on a product by product basis, evaluating 15 products and services in total Endorsement Carbon Trust and Camanoe Associates reviewed the Scope 1,2 & 3 measurement approach and the approach to measuring carbon abatement on a product by product basis, evaluating 15 products and services in total After establishing a firm understanding of the product or service, Carbon Trust and Camanoe Associates looked at the carbon footprint model including the approach and assumptions; the carbon factor, their values and the data sources used in the calculations The 3:1 methodology: External endorsement © British Telecommunications plc

Better Future 12 Better FutureNet Good Integrated Energy Management Services Audio- conferencing Telecommuting Flexible Working Services No of home workers (ONS data) Proportion enabled by BT broadband Carbon saving/ telecommuter [ACI Study, Yankee Group Study, BT Study] No of home workers (ONS data) Proportion enabled by BT broadband Carbon saving/ telecommuter [ACI Study, Yankee Group Study, BT Study] Number of BT conference calls per year Carbon saving per call [University of Bradford Study] Number of BT conference calls per year Carbon saving per call [University of Bradford Study] No of Contracts/year Energy saving per contract [from analysis of BT savings and analysis of potential contracts] Carbon saving due to energy savings No of Contracts/year Energy saving per contract [from analysis of BT savings and analysis of potential contracts] Carbon saving due to energy savings No of Contracts/year Desk / office space saving per contract [from analysis of existing contracts] Carbon saving due to office heating / lighting energy savings No of Contracts/year Desk / office space saving per contract [from analysis of existing contracts] Carbon saving due to office heating / lighting energy savings The 3:1 methodology: Examples of carbon abatement © British Telecommunications plc

Better Future 13 Better FutureNet Good As an extension of our open sourced approach we’ll be inviting further comment/ critique at an online forum on 2 July. The Better Future Forum will be an opportunity for BT to share its experience so far and learn from others through open discussions, independently moderated. We have made the methodology available via our website & we’ll be inviting suggestions for further improvements. Online Forum The 3:1 methodology: Engaging stakeholders to evolve our approach © British Telecommunications plc Following the review BT worked with The Climate Group and The Carbon Trust on a stakeholder consultation to gather further feedback from industry experts. Consultation The feedback from the consultation and today’s launch event organized by The Climate Group will be used to further evolve the methodology. Feedback

Better Future 14 Better FutureNet Good