Managing 
our social 
responsibility


Performance depends not only on the good will of managers and employees, but also on the systems used to incorporate policies in our daily routine. We employ relevant international management system standards wherever they apply in the organisation. These include:

• ISO 9001 (for operational excellence). This relates to our customers.
• OHSAS 18001 (for work place safety). This relates to our people.
• ISO 14001 (for environmental management). This relates to our world.
• Investors in People (for personal growth of employees). This relates to our people.
• SA 8000 (for social responsibility). This relates to our people, our customers and our world.

These international standards are important as they provide an objective and accepted baseline to which employees, customers, suppliers and other stakeholders can refer. They are also a powerful management tool for steering performance and ensuring continuous improvement.

Improving ourselves and improving the sector

We engage actively in stakeholder dialogues. There are two main reasons for this. First, stakeholder dialogues provide a setting for confirming and obtaining further information on stakeholders’ dominant issues and, where discrepancies or issues arise as to current policy, for entering into discussions on possible solutions. Second, taking into account the reputation of the transport sector, we believe that if our sector as a whole is able to enhance its reputation, we will enhance our own.

There is currently limited comparative information on the social responsibility performance of transport and logistics companies. To make reporting meaningful, readers must be able to understand how results compare to the industry as a whole. TNT is actively involved in initiatives such as the sector-specific GRI chapter to improve transparency in performance.

Inspiring our employees and our surroundings

TNT engages in commitments that extend beyond compliance. These commitments ensure a unique character to company operations and differentiation on aspects we find both relevant and important. Yet our efforts are motivated also by the firm belief that sticking solely to a license to operate is not enough. Actively seeking new ways to help the world opens doors to new and innovative initiatives. This has a positive impact on our 140,000 employees and drives their willingness to operate at the peak of their abilities. Two major initiatives in this area are TNT’s partnership with the United Nations World Food Programme and our Driving Clean initiative. Further details are available under Corporate citizenship (page 30) and Our world (page 36), respectively.

Dow Jones Sustainability Index

We benchmark our performance against the Dow Jones Sustainability Index. This index allows investors to compare companies’ performance in social responsibility within and outside a company’s sector. It is also a source of company pride. In 2005, we entered the index as industry leader and managed to maintain this position in 2006 (part of the Dow Jones Sustainability assessment 2006 is found in Annex 2). With the inclusion of Deutsche Post World Net in the DJSI last year, the index is more relevant to our operations as, alongside UPS, it now provides a second comparison with another of our most direct competitors.

For further details, please refer to our website http://group.tnt.com/socialresponsibility/standards/dowjonessustainabilityindexes/index.asp.

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Dow Jones Sustainability Index: Industrial transportation
Company	Country	Industry leader	DJSI World		DJSI STOXX
			Universe	Member	Universe	Member
ABERTIS Infraestructuras	Spain		x	x	x	x
Deutsche Post AG	Germany		x		x	x
Fraport AG FrankfurtAirport Services Worldwide	Germany		x	x	x	x
Mitsui C.S.K. Lines Ltd.	Japan		x	x
Nippon Yusen KK	Japan		x	x
TNT N.V.	The Netherlands	x	x	x	x	x
Transurban Group	Australia		x	x
United Parcel Service Inc.	United States		x	x

Stakeholder dialogue

At TNT, we are committed to ensuring that our social respon-sibility programme addresses the issues that are important to our stakeholders. Stakeholder engagement is important as it allows us to understand the impact of our activities on various groups, prevents negative repercussions, forms productive partnerships and captures a range of different opinions and perspectives. Knowledge of our stakeholders’ concerns helps us to develop new products and services as well as address social responsibility challenges in cooperative ways.

This approach has been recognised as industry-leading by the Dow Jones Sustainability Index. It is also increasingly acknowledged by mainstream investors and rating agencies as indicating good operational and risk management.

What is a stakeholder?

We define stakeholders as any interested party, either group or individual, which can affect or is affected by an organisation delivering its objectives. They may be local communities, customers, NGOs, special interest or campaign groups, government agencies and officials, shareholders, business partners or suppliers. They also influence programmes, products and services. ‘Stakeholder dialogue’ is a term we use to describe our efforts to build partnerships in the same way as we would engage a business partner.

How do we do it?

We began our stakeholder dialogue in 2004 as part of the WEF Logistics & Transport Corporate Citizenship Initiative (L&TCCI). This cross-industry initiative allows us and other members to work together in identifying and developing potential solutions to those issues that affect a range of stakeholders.

One of the first pieces of work undertaken by the L&TCCI was to identify which stakeholder groups are important to the logistics and transport sector. We identified the following key groups: customers, civil society, suppliers, subcontractors, investors and employees.

After identifying these groups, the L&TCCI asked an independent corporate citizenship consultancy to consult with customers, civil society, suppliers and employees during 2004 and 2005. They were also asked to consult separately with TNT’s own suppliers. These consultations are discussed below.

What do our customers want?

As part of an ongoing stakeholder engagement process and because the concerns of stakeholders can change over time, it is important to ensure that consultation is repeated at regular intervals. As part of this process, TNT started its second consultation with some of its most valued customers in 2006.

The overall aims of this consultation were to:

• Learn more about TNT customers’ current and future concerns and requirements with respect to business ethics, social and environmental issues.
• Determine how customers assess supplier performance now and in the future.
• Conduct a feasibility study of customer interest with respect to new ‘socially responsible’ services and partnerships that address greenhouse gas emissions through the use of alternative fuels or offset and to provide assurance on the business ethics, social and environmental integrity of customer supply chains.
• Identify customers that might participate in a multi-stakeholder forum that will comment on how well TNT is managing and reporting on stakeholder concerns.

We have developed a comprehensive questionnaire to meet these objectives and to provide a detailed sustainability assessment of specific customers. We are using two methods of investigation to populate the questionnaire, provide additional information about the customer’s overall level of engagement with social responsibility and identify potential business opportunities: internet research of publicly-available information and telephone-based interviews with a range of customers.

The results

The results of the stakeholder dialogues are summarised in the table overleaf for each of the stakeholder groups. We have also included preliminary results from the most recent customer engagement, which is still ongoing, and a combined summary of the results.

Based on the results, it is clear that there is a substantial difference between the top five expectations for each stakeholder group. Despite this variation, it is also clear that there is agreement that the dominant concerns are compliance with legislation and reducing carbon dioxide emissions.

Taking account of stakeholder concerns

In last year’s report, we made a commitment to develop an approach that ensures we embed fully the results from all dialogues within our company and that they contribute to continuous improvement in our overall social responsibility.

During 2006, we developed a strategy to ensure that we can meet this commitment. This includes:

• Ensuring we incorporate stakeholders’ concerns in our overall strategy and include them in our targets.
• Ensuring the Board of Management and Supervisory Board’s involvement and commitment in social responsibility to determine strategy, develop a programme and review progress.
• Establishing a customer review panel to:

• Guide the development of the SR programme.
• Ensure the SR programme enhances customer confidence.
• Ensure the SR programme enhances customer confidence and leads to the development of new competitive/profitable products.

TNT stakeholder dialogue since 2004: results

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Civil Society 2004	Customers 2004	Subcon-tractors 2005	Employees 2005	Investors 2005	Suppliers 2006	Customers 2006/7
Reducing CO2 emissions (48%)	Compliance with legislation especially where enforced weakly in developing countries (71%)	Child labour in the supply chain – especially second and third tier (71%)	Increasing alternative fuels and energy in vehicles and buildings (59%)	Reducing environmental footprint (37%)	Compliance with legislation especially where enforced weakly in developing countries (68%)	Employee health and safety (67%)
Employee health and safety – including HIV/AIDS (46%)	Child labour in the supply chain – especially second and third tier (68%)	Compliance with legislation especially where enforced weakly in developing countries (57%)	Accountability and transparency relating to strategy and manage-ment decisions (56%)	Assuring security and safety of transportation (17%)	Reducing CO2 emissions (61%)	Reducing CO2 emissions (65%)
Pollution – associated with vehicle particulates (46%)	Compliance with a code on social issues (59%)	Anticompetitive behaviour associated with price-fixing and profit implications (57%)	Pensions and retirement benefits for employees (49%)	Achieving recognised excellence by customers (14%)	Discrimination – equal, fair treatment of all employees (45%)	Fair and reasonable terms of employment (54%)
Community health and safety – including HIV/AIDS (31%)	Implementing environmental management systems (41%)	Reducing CO2 emissions (50%)	Compliance with legislation especially where enforced weakly in developing countries (41%)	Implementing good governance and risk management (10%)	Accidents in the workforce – driving and in warehouses (42%)	No child labour (50%)
Partnerships with local communities and international organisations (30%)	Continuous improvement in environmental performance (37%)	Bribery, corruption and conflict of interest (50%)	Ensuring good work/life balance as essential to wellbeing and quality of life (40%)	Implementing international codes of conduct and labour standards in globalised operations (8%)	Bribery, corruption and conflict of interest (40%)	Compliance with legislation (46%)

Our supply chain: engaging subcontractors

While we clearly have full control of our own, in-house teams, some forty percent of our business is contracted out to agents, associates and subcontractors who we call on also to meet our social responsibility standards. Over the last twelve months, we have held discussions with a range of subcontracted drivers in the United Kingdom and the Netherlands to see how we can further enhance the level of their commitment to our request, thereby meeting one of the concerns of our stakeholders.

The objective of our discussions is to explore our subcontractors’ views regarding social responsibility, to discuss our joint opportunities and problems, and to use the input as basis for a plan of action for a social responsibility partnership over the coming years. In our first three exploratory sessions, we explained the importance of implementing rules and directives equivalent to the ones set forth in the TNT Business Principles. Management systems related directly to social responsibility that we would like to see implemented include OHSAS 18001 and ISO 14001. We would like also for them to report on our target KPIs.

Our specific aim is to determine stakeholder limitations in implementing these systems and measuring the key performance indicators, and to find out how TNT can help to improve their social performance.

While the meetings indicate awareness of social responsibility amongst subcontractors is growing, there are a number of barriers inhibiting implementation:

• The subcontractor business is strongly cost-driven. Money is an important aspect for all the subcontractors.
• Technology plays an important role. Keeping the costs low and at the same time developing new technologies will even-tually lead to a more environmentally-friendly and ‘greener’ business. These technologies need to be cost effective, how-ever, thereby contributing to an ongoing process of becoming a cleaner sector as a whole. One of the most promising areas lies in alternative fuels or in teaming up in the purchasing area, thereby reducing overheads and freeing up capital for investment in social responsibility-related systems.
• It is a slow process in which competition is an important factor. Maintaining profitability remains the most important driver.

Despite these limitations, almost all subcontractors emphasised their understanding of our desire to implement the requested systems and feel it is important to exchange thoughts on social responsibility. While there is willingness to change, the process is likely to take some time. Should the duration of their relationship with TNT be guaranteed in some way, many would gladly implement social responsibility systems in their daily operations, which in turn would be facilitated through securities for smaller companies, making them feel more connected to TNT’s standards and values.

These initial discussions are the beginning of a long-term process in which we aim to increase greatly our subcontractors’ commitment to our social responsibility ambitions, implement the agreed systems and report according to the agreed KPIs.

TNTs position in the supply chain