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The business case for social responsibility
Introduction
Dear reader,
Social responsibility is an integral part of the way we do business at TNT and we try to be mindful of our commitment to our people, stakeholders and the world around us. Our commitment to the world is reflected in ongoing projects such as our partnership with the United Nations World Food Programme and in new projects such as our Driving Clean initiative. As far as our people are concerned, we have increased the number of our businesses that meet the international Investors in People standard and, listening to our stakeholder concerns, we have engaged in further dialogues with them and report about the advances we have made in these discussions. Our improved performance in the Dow Jones Sustainability Index benchmark shows we are heading in the right direction. Although we are pleased with our progress, we are not yet satisfied with our performance and plan to continue improving across the board. This social responsibility report, the third we have published, provides a summary of our progress in all our major business areas over the last twelve months. In our view, it represents a balanced presentation of our organisation’s economic, environmental and social performance.
There are numerous reasons why we value doing business in a way that demonstrates our internal and external responsibility. Consistently acting responsibly will help instil pride in our people and improves the reputation of our company. This makes us attractive both now and in the future to the talented professionals around the world. From a business perspective, we see our customers and other stakeholders focus increasingly on the social and environmental impact of our activities. For some of our clients it is already part of the decision-making process whether or not to employ our services, and if nothing else at TNT, we believe companies can make a real contribution to many areas of society and have the responsibility to do so.
We present our performance according to the Global Reporting Initiative (GRI 2002) and AA1000 Standard. We feel this increases the transparency of our business and enables the public and investors to benchmark us against our competitors. Reporting also gives readers and stakeholders the chance to provide feedback. This feedback has been and continues to be an important driver in the way we operate.
TNT’s social responsibility report is an important management tool in our company. Initially our focus has been on establishing standards that allow us to report consistently on all relevant KPIs. Now that measurement throughout the company is improving – although further work is required – the awareness of and accountability for the results will be heightened. The tables overleaf show the progress we made in 2006 and our targets for the coming years.
PricewaterhouseCoopers provides external assurance on our reported data. This year, we also introduced an internal audit system for assessing our social responsibility. We ask various organisations to assess our progress. AccountAbility, the VBDO (Dutch Association of Investors for Sustainable Development), Sustainable Asset Management (on behalf of Dow Jones) and Dutch Sustainability Research benchmark our performance against others. These organisations provide feedback as to how we can improve our performance. Based on feedback on last year’s full-year report, our focus areas this year have included:
- Developing and agreeing target areas with a focus on our priorities: environment, health and safety, customers, and employees.
- Defining and setting up a reporting protocol, roles and responsibilities.
- Further strengthening and clarifying the involvement of the Board of Management and Supervisory Board.
- Organising dialogues with our subcontractors.
- Embedding feedback from our stakeholder dialogues.
- Integrating social responsibility in our internal audits.
- Ensuring compliance with the AA1000 Assurance Standard.
- Integrating social responsibility data handling in our financial reporting system.
We are on our way to accomplishing these improvements. Details are found in this report.
One of the improvements in our reporting is the scope of units that we include. For the first time, this report includes data from all our owned sites instead of certified sites only. While that in itself is positive, it also means that comparing this year’s data to figures in last year’s report is not always possible. Key indicators such as certification, road accident fatalities and our CO₂ footprint remain comparable to 2005 as all our sites already had to report on these indicators.
Of the many different aspects of our business on which we report, I think internally our health and safety performance is most relevant. Externally I expect the CO₂ emissions to attract the most attention in the years to come. It is now clear that the crisis the world faces in terms of global warming is real and requires urgent action. Our industry must come forward in finding solutions.
While our operating profits continue to develop positively with good share price performance, our company is more people-friendly and has helped feed more of the world’s hungry. We have also introduced various initiatives to reduce our environmental footprint. I believe these and other projects are a good foundation for some new initiatives we expect to roll out in 2007. Social responsibility is an integral part of TNT’s business, making us such a special company to work for.
Peter Bakker, CEO
Hoofddorp, the Netherlands,26 February 2007
TNT’s operational performance
The table below summarises our operational performance.
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| Operational Performance 2006 | 2005 | 2006 |
| ▲OHSAS 18001 certification | 23% | 82% |
| ▲Investors in People certification | 82% | 79% |
| ▲SA 8000 certification | 5% | 48% |
| ▲ISO 9001 certification | 77% | 80% |
| ▲ISO 14001 certification | 52% | 65% |
| Blameworthy road traffic accident rate per 100,000 km | 2.06 | 1.98 |
| Blameworthy road traffic accident rate per vehicle | 0.63 | 0.65 |
| Lost time accidents frequency rate | No data | 3.1 |
| Percentage of satisfied employees | No data | 79% |
| Percentage of satisfied/very satisfied customers | 89% | 89% |
| CO₂ emissions | 715.2 ktonnes | 825.6 ktonnes |
| Electricity use in kWh / m² | 93 kWh / m² | 84 kWh / m² |
| Gas use in m³ gas / m³ building | 2.1 m³ gas / m³ building | 1.8 m³ gas / m³ building |
| Average litres fuel used per 100 km by company cars | 6.9 | 6.8 |
| Average litres fuel used per 100 km by small trucks and vans | 10.3 | 11.0 |
| Average litres fuel used per 100 km by large trucks | 20.9 | 22.5 |
| Corporate citizenship/employee fundraising for WFP | €2,159,000 | €2,421,000 |
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Meeting the targets
Our targets up to 2008
In our 2004 social responsibility (SR) report, we communicated our ambition to certify all fully-owned TNT operations in accordance with relevant international management system standards by the end of 2007. These standards were Investors in People (for personal growth of employees), ISO 9001 (for operational excellence), ISO 14001 (for environmental management), OHSAS 18001 (for work place safety) and SA 8000 (for social responsibility).
In our 2005 SR report, we published “a roadmap to certification” per division and reported that both Mail and Express will not reach 100% coverage for all certificates by the end of 2007 based on a cost versus benefit analysis. In basic terms, this means that both Mail and Express exclude a number of their (business) reporting units because of the very small number of employees involved.
During 2006, it became clear that the targets set for Mail for 2006 and published in our 2005 SR report would not be reached for two reasons:
- In European Mail Networks, business units were coping with the strategically important task of becoming the alternative to the incumbent in each of their European countries. Having to adapt to the stringent corporate governance requirements (all companies acquired were private companies), Mail decided not to burden the organisation with achieving full certification in addition to the existing challenging management tasks. In 2007, European Mail Networks business units are initiating certification, although a few are still excluded based on their challenges in a highly competitive environment.
- Full certification of Mail Netherlands was achieved but, due to the implementation of various Master Plans, the number of staff working in Mail Netherlands shrunk with immediate implications for the coverage percentages for the defined certification targets. The outflow of staff within Mail and an imminent new Master Plan will also influence the targets set for 2007.
In Express, another phenomenon is important in understanding the targets, namely the implication of recent significant acquisitions: TG+ with 2,600 employees and Speedage with 1,195 own employees and 1,300 subcontracted staff. We will exclude these acquisitions from the challenge of full certification for a three-year period, allowing them to adapt to our company (governance, systems, culture, etc). Up to 2005, Express had more or less grown organically (Jet Services being the last significant acquisition in 1998), and its projections to achieve the close-on 100% target were based on the hypothesis of continued organic growth.
With the above in mind, we recently have decided in our Board of Management meeting to restate the targets in order to show our improvements.
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| 2006 | 2007 | ||
| Restated target* | ▲ Actual | Restated target* | |
| OHSAS 18001 based on FTEs | 77% | 77% | 81% |
| Investors in People based on headcount | 68% | 68% | 79% |
| SA 8000 based on FTEs** | not applicable | not applicable | not applicable |
| ISO 9001 based on FTEs | 77% | 80% | 85% |
| ISO 14001 based on FTEs | 77% | 77% | 81% |
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| EXPRESS | 2006 | 2007 | |
| Target | ▲ Actual | Restated target* | |
| OHSAS 18001 based on FTEs | 55% | 87% | 99% |
| Investors in People based on headcount | 98% | 98% | 99% |
| SA 8000 based on FTEs** | 35% | 48% | 99% |
| ISO 9001 based on FTEs | 80%* | 80% | 99% |
| ISO 14001 based on FTEs | 39% | 56% | 99% |
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