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report
/ KPN Sustainability Report
Contents
Foreword
The company
Conclusion
Assurance Report
GRI table
Appendices
Colophon
We live in times when matters other than financial and economic considerations are on the agenda.
More than ever before we are addressing in what shape we will leave the world to our children and
grandchildren. In this report we describe our activities in in the field of sustainability, and in a wider
context, corporate social responsibility. We present as openly and clearly as possible what KPN has
accomplished and addressed in the Netherlands at KPN and at subsidiaries like Telfort, and in Germany
(E-Plus) and Belgium (BASE). The report sets out how KPN is integrating sustainability in its conduct of
business.
In numerous fields we have achieved results. One of our themes is to create a new kind of relationship
with the customer. Instead of being a technologically-oriented company, we are increasingly turning our
focus towards the customer’s needs. We are meeting those needs by supplying innovative services and
products, like Mine, the new way of watching television, and mobile solutions like KPNOpWeg, a route
planner integrated in a BlackBerry smartphone. Another example of our innovative services is Internet-
PlusBellen, which combines telephony and surfing in a single product. The service’s enormous commer-
cial success demonstrably shows that it meets a demand that exists among customers: in less than one
year, we sold more than ,. Unfortunately, this success was accompanied for some of our custom-
ers by serious technical or administrative problems that we were not always able to resolve quickly
enough. We are working hard on structural solutions to overcome these problems. Fortunately, our
customer satisfaction scores indicate that the problems with InternetPlusBellen are not typical of the way
customers rate our services. Customer satisfaction is and will always be a highly important aspect of a
sustainable relationship with our customers.
Sustainability has a knock-on effect on the company’s relationship with its employees, our second
theme. This relationship is changing. KPN has adopted a new human resources policy that gives employ-
ees greater individual freedom and scope for personal development. But we also select them according
to these criteria and expect them to display initiative, creativity and responsibility. Other milestones
include the shedding of employees due to the shrinking market for fixed telephony. But opportunities
are unfolding in other areas. Another highlight was preparation of the integration of fixed and mobile as
of January , .
KPN sponsored various community initiatives in the Netherlands and other countries, the third theme of
our report. Our guiding principle is that KPN supports activities closely aligned to its core business. Our
spearheads are healthcare, young people, education and – in a wider sense – a contribution to the
knowledge-driven economy. Other noteworthy activities are our support of the Ronald McDonald
children’s fund, Turkish children in Germany (El Ele) and kids@thecoast, a project that supports young
cancer patients in Belgium.
To provide a complete picture, we did not achieve everything that we wanted to achieve. For one thing
we have not yet been able to build sustainability into the supply chain with our suppliers. But this is
definitely on our agenda for .
These and other goals feature in our policy on corporate social responsibility that we plan to update in
for the years ahead. This year we will formulate hard and challenging targets on which we will
report in early . Our annual sustainability report will become even more concrete and deal even
more explicitly with our results measured against the formulated goals. At KPN we are acutely aware that
we have a lot of work ahead of us. But it’s a challenge we are keen to take on board.
Ad Scheepbouwer
GRI guidelines
This report is based on the guidelines issued by the
Global Reporting Initiative (GRI), an organisation
that provides a global standard for reporting on
sustainability. At KPN we report largely in line with
the G version of . Consequently, from the
numerous themes in each chapter, we made a
selection based on relevance and priority. Each
chapter deals at length with two or three key items
and for other aspects only a summary is provided.
The appendices provide additional data. KPN
makes only limited use of the GRI supplement
produced specifically for the telecommunications
industry. This is because the supplement is not yet
sufficiently aligned to the industry, which is why we
believe that most other telecommunications
operators in Europe are not yet using it either.
Mission statement
Our main objectives, as described in article of our
Articles of Association are ‘to participate in and to
manage other enterprises and companies, among
such, companies that operate in the field of the
transmitting, storing and converting of information,
as well as to manage and dispose of information.’
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Highlights in
- Programme to improve the standard of service for InternetPlusBellen
(internet telephony)
- Higher customer satisfaction with KPN in the Netherlands
At the end of we announced plans to tackle Mobile Division % % % %
Privacy
KPN exercises due care and attention when
handling customer details and disclosing them to
third parties for commercial purposes. We do this
to make that as a company we conduct business
responsibly. KPN obviously adheres strictly to
requirements contained in the Data Protection Act.
In we integrated telephony, internet and TV.
Highlights in
- KPN named company with ‘Most improved Investor Relations in the
European telecommunications industry in ’ in a survey conducted
by Institutional Investor among , analysts and investors.
- In the annual independent Transparency Benchmark undertaken on
behalf of the Ministry of Economic Affairs KPN was ranked th out
of stock exchange listed and non-listed companies.
Table Performance of KPN share vs. indices (cumulative performance since in brackets)
Is this what
you do?
Highlights in
- Effective organisation
- Optimum staffing
- New relationship between employees and KPN
Optimising staffing
Contributing to KPN
KPN wants to operate more responsively to be ‘Imagine being able to state clearly what
stronger in a highly competitive market. Besides contribution you personally make to fulfilling
integrating Fixed and Mobile, we need to reduce KPN’s objectives, having the scope and
our number of employees. The objective of an influence to deliver that contribution in full.
annual downsizing in the Netherlands by , to You can naturally get the support you need to
, employees has been achieved. Severances do it. You have the scope to make your own
totalled , in (compared with , in decisions within the confines of your respon-
). In terms of growth and shrinkage, KPN sibility. And because you have such scope and
carried out several acquisitions and insourcing/ facilities, you are better able to take respon-
outsourcing projects in . sibility for the contribution you deliver.
Imagine being able to appraise your employ-
KPN Perspectief ees and reward them in line with their
We have professionalised our mobility network to performance and the way they delivered it.
streamline the process of helping employees to And being appraised and rewarded yourself
find new jobs. On February , , the KPN in the same way. Offering possibilities and
Mobility Shop transferred in its entirety to a facilities for combining professional and
collaboration consisting of Smart Group and personal development motivates people to
Randstad Mobiliteitsdiensten. This created a new go the extra mile. You know your ideas and
organisation called KPN Perspectief, an intermedi- suggestions will get a hearing, colleagues
ary organisation with a larger network. It will will help each other bring about improve-
certainly increase re-employment opportunities for ments and you will feel a strong commitment
employees leaving the company. to the success of the organisation as a whole.’
KPN Perspectief mediated for employees in
. In the same year, the organisation assisted Hein Knaapen, Director of Human Resources
employees in finding a job outside KPN and of KPN, explained early the vision KPN
helped employees to get a new job within has of its new relationship with its employees.
KPN. Including the inflow from , people
are currently still receiving assistance from
KPN Perspectief.
A P
Outsourcing -
Insourcing
Acquisitions
Refer to the annexes for more figures about our numbers of employees and the composition
of the workforce.
employees. To this end we follow the development Means (personal development) .
of employees continuously and take remedial Team spirit (workplace climate) .
. The emphasis is on the personal responsibil- Corporate social responsibility .
Eliminating barriers
KPN operates various facilities for removing
barriers standing in the way of an employee’s
career. They include childcare facilities, part-time
work, employee-selected schedules and saving for
leave to provide care or for sabbaticals.
Highlights in
- Support for education and young people
- More effective healthcare
- Stimulation of art and culture
Highlights in
- Stimulation of the knowledge-driven economy
- Contribution to efficiency in healthcare
- Antenna policy
- Support in controlling costs
Highlights in
- Assessing products and services according to sustainability
- Purchasing low-energy equipment
- Determining the need to select our suppliers
Catering
Communication about waste processing We replaced all our vending machines for hot
KPN adheres to EU policy on informing consumers drinks at year-end . The new machines
that communication products do not belong with consume less energy. At the same time, all parts of
grey waste. This is follow-up action on the Euro- KPN switched to using coffee with the Max Have-
pean WEEE (Waste Electrical and Electronic laar fair trade label. Each year the approximately
Highlights in
- Attention to energy saving within ETNO
- Energy consumed by the infrastructure
- Reduction of CO emissions through ‘The New Way of Driving’
- Waste policy
2006 1) 2)
2005 2)
2004 2) 2003 2)
KPN, . F TOTAL KPN, . F TOTAL TOTAL TOTAL
D D
Fuel for vehicle fleet
) Includes Intis Networks KRAL, KCC Nederland (KPN Contact) and Telfort.
KPN’s energy consumption new equipment into service for new KPN services.
The total electricity consumed by KPN in in During we embarked on projects which
the Netherlands and other countries came to , should provide more insight into the energy KPN
TJ (= , GWh). This corresponds with % of all consumes at its various premises. The information
the energy we use. Our technical buildings (includ- obtained from telemetry through energy monitor-
ing the mobile network) accounted for % of our ing will enable us to take targeted energy-saving
electricity consumption. Most is for the telecom- measures in the course of .
munications infrastructure. The equipment itself
accounts for approximately %, while approxi- Cooling
mately % is necessary for cooling and other KPN is constantly working on improving its cooling
purposes. efficiency, i.e. reducing the energy needed for this
Our electricity consumption will increase as a result purpose. In we tackled air cooling in our
of the delivery of new services like All IP. Therefore, equipment rooms, for example. We are improving
KPN has given priority to reducing the energy used the harmonisation of the required volume of cool
by the telecommunications infrastructure. air to the equipment present in the room. What’s
more, we are making more and more use of
Energy management outdoor air to cool our premises.
From KPN will start managing energy cen-
trally within the company in order to improve our We are already cooling one location by means of a
energy performance structurally. district cooling system. At our building in Dren-
testraat in Amsterdam we have decided to use cool-
ing water obtained from the NEON energy com-
pany. Instead of generating our own cooling water,
Developments in we will use surface water that comes from the
‘Nieuwe Meer’ lake in Amsterdam. Compared with
the Netherlands traditional cooling, this will reduce emissions of
carbon dioxide (CO) by about %. The installation
is due to be operational at KPN in the second
quarter of .
Technical premises
The consumption of electricity at our technical
buildings remained almost stable in com-
pared with . We decommissioned a lot of old
equipment in and we needed less equipment
for connections and lines. However, we also put
Production building
Transmission station and production unit
Nieuwe Meer
Cold exchanger
In we will follow up a number of energy Table shows that electricity is the biggest source
saving options, with the possible use of direct of CO emissions. When it comes to ‘direct energy’,
cooling by means of outdoor air and groundwater the fuel we use for our vehicle fleet is the greatest
as a cooling agent through the application of a source of emissions of CO. As these emissions can
heat exchanger in the soil. be influenced directly, we have made the reduction
of fuel consumption a key item at KPN.
Measures at offices
Replacing old computer monitors by flat screens CO² reduction through ‘New Way
has reduced energy consumption. It has also had of Driving’
a positive effect on the discharge of heat in office At one part of KPN we began teaching drivers the
buildings. ‘New Way of Driving’ (Het Nieuwe Rijden) in
as part of our corporate environmental responsibil-
ity. All relevant engineers and drivers of company
cars in a certain region took the course. KPN
Reduction of carbon expects this product to yield by December ,
a substantial reduction of CO emissions by the
dioxide emissions participating vehicles (i.e. a CO emission reduction
of to percent).
2006 1)
2005 1)
2004 1) 2003 1)
KPN, . F TOTAL KPN, . F TOTAL TOTAL TOTAL
D D
I
Electricity )
D
Gas
Paper
KPN has switched to using multi-purpose scanning,
copying and printing machines. The machines are
set as default to double-sided printing. The
standard scanning and e-mail functions of the
machines have produced a further relative reduc-
tion of paper consumption. Since November ,
we have also been printing our last major hardcopy
bill streams double-sided. A further increase in the
digitization of bills is planned for . These
developments will reduce consumption still further
in . Thanks to improved insight, we now know
that paper consumption at KPN appears to have
increased. Another cause of the rise is the larger
number of marketing campaigns and advertising
devices.
Conclusion
Based on the above work we conclude that the
information in Chapters to of The Report is not
unfairly stated.
Commentary
Our review also identified a number of recommen-
dations which do not affect the conclusion above
but which are important for improving sustainabil-
ity reporting in the future. We recommend that
KPN:
. - . Statement from the most senior decision-maker of the organization about Foreword
O
. - . Name and operational structure of the organization The company
R
. - . Reporting and contact point(s) KPN and corporate social responsibility
. - . Process for defining report content KPN and corporate social responsibility
Policy and current practice with regard to seeking external assurance KPN and corporate social responsibility
. Processes in place to ensure conflicts of interest are avoided Financial annual report and Form -F
. Internal principles and codes of conduct for corporate social responsibility KPN and corporate social responsibility
The company
. Memberships in associations and/or advocacy organizations KPN and corporate social responsibility
S
. - . List and selection of stakeholder groups engaged by the organization KPN and corporate social responsibility
(including topics)
EC - EC Economic performance Financial annual report and Form -F
EC - EC Market presence Financial annual report and Form -F
EN - EN Materials used and recycled (other than water) Operations and the environment
EN - EN Emissions into the air Operations and the environment
EN + EN Waste, including hazardous waste Operations and the environment
EN Significant spills into the soil, air and/or water Operations and the environment
EN - EN Products and services, including initiatives to mitigate environmental Procurement / Appendix
EN Monetary value of significant fines and total number of non-monetary The company
LA Ratio of basic salary of men to women by employee category Not reported
HR - HR Agreements with and screening of suppliers and contractors Purchasing
HR Number of incidents of violations involving rights of indigenous people Not applicable
SO Nature, scope, and effectiveness of any programs and practices that assess Not applicable
SO - SO Public policy positions and contributions to political parties Not reported
SO Significant fines and total number of non-monetary sanctions for The company
PR Life cycle stages in which health and safety impacts of products and services Products and services
PR Non-compliance with regulations and voluntary codes concerning health Products and services
PR - PR Number of substantiated complaints regarding breaches of Products and services
PR - PR Product information policy, including customer satisfaction Our customers
PR - PR Codes of conduct related to marketing communications, including number Our customers
In millions of euros
In millions of euros
In millions of euros
In millions of euros
In millions of euros
In millions of euros
Net debt )
, ,
) Net debt = Long-term interest-bearing liabilities + short-term interest-bearing liabilities -/- cash and cash equivalents.
KPN N
S
I
N
,
,
,
,
D M W F- P- M W F- P- M W F- P-
Total .% .% .% .% .% .% .% .% .% .% .% .%
Performance-related pay
Table Performance-relaed pay in
Offices %
Monitor and measure all types of energy consumption effectively (electricity, gas and oil) in
order to identify areas for improvement and to set quantitative improvement targets.
Identify, monitor and measure all major GHG emissions from direct and indirect activities
related to running telecommunications business.
Improve energy and emission efficiency in mainstream processes (networks, buildings, mobility,
overhead, etc.) and reduce energy consumption where practicable relative to business growth.
Design energy efficiency into all new equipment and services, including terminals, fixed/mobile
network elements, network buildings and offices, etc.
Increase, where possible, the use of energy from renewable sources and prefer energy
suppliers with less GHG emissions per energy unit.
Incorporate energy efficiency criteria in purchasing, supplier selection and sub-contracting
processes and work in partnership with suppliers to minimise equipment energy consumption.
Educate employees, customers and partners about energy issues, the impact operators have as
major organisations and what they can do to help.
Share knowledge and good practice with other ETNO Members by joining the ETNO
Sustainability Charter, and report on energy performance within ETNO’s annual
sustainability reports.
Support and help to develop EU initiatives on the reduction of energy consumption
(e.g. the Code of Conduct on energy consumption of Broadband Equipment).
Comply with all applicable legal requirements, regulations and standards.
KPN N.V.
Address for visitors
Maanplein
CK The Hague
Postal address
Postbus .
GA The Hague
www.kpn.com
Translation
DBF Communicatie, Alphen a/d Rijn
Design
Smidswater, The Hague / Breda
Photography
WassinkLundgren, Amsterdam
Layout consultant
Kirsten Algera, Amsterdam