Dear reader,
An important part of our mission is our commitment to sharing responsibility for the world in which we operate. Through our international operations and the nature of our business, TNT benefits from globalisation and the resulting increase in international goods flows. As perceived distances between the continents decrease, we are all becoming neighbours. This creates responsibility.
We are convinced that any action a company undertakes to help solve a major problem in the world can be a source of pride for its employees. This is a vital factor for any service company, where success is a direct result of employee engagement and customer trust. We also see that attention to sustainability enriches our brand.
To better understand our position in the world as a whole and specifically in our markets, we are in constant dialogue with our stakeholders, and especially with our customers. Their views and demands shape the way we develop our business. In recent dialogues we have seen an emphasis on the environment.
These demands are more challenging than ever before. In line with these developments, the Board of Management is actively involved in developing sustainability policies within our company. This includes setting sustainability targets for management and linking them to their incentive schemes.
Implementing the standards We have a clear-cut sustainability strategy. We improve our performance as a responsible employer by implementing a set of five management systems. These include OHSAS 18001 (health and safety), Investors in People (training and employee development), SA 8000 (labour standards and personnel rights, only in non-OECD countries), ISO 9001 (quality) and ISO 14001 (environment).
Implementing these systems ensures structured, continuous improvement in our performance in these areas. It provides us with clear key performance indicators, as well as evaluation and benchmarking processes. We almost completed implementation within Express in 2007 and continue to work towards full certification within Mail. In 2008, we will continue embedding sustainability targets in our managers’ incentive schemes.
Challenges remain: our sizeable acquisitions in China, India and Brazil will have to work hard to meet our standards and specific plans have been developed to achieve them. One issue that seriously concerns us is the high number of fatal traffic accidents in the emerging markets in 2007. Another challenge is our subcontractors. They are involved in a large part of our operations yet implementing our standards could be a burden for them because of the limited size of their operations or cost issues. However we must stimulate them to start reporting on our sustainability key performance indicators. For the first time, this report includes an estimate of our subcontractors’ CO2 footprint.
Differentiating ourselves
Another pillar of our sustainability strategy is our effort to differentiate TNT through inspiring sustainability programmes and sharing responsibility for the world.
As long as hunger in the world remains in part a logistics issue, we will share our knowledge and resources to fight it. Our commitment in this regard is reflected in our recently extended partnership with the United Nations World Food Programme (WFP).
In August 2007, we launched our second external programme: Planet Me. This will help us to manage our greenhouse gas emissions. Climate change may be the greatest challenge the world faces today and most scientists agree that climate change is caused by the increased emission of greenhouse gases, mostly CO2. As transportation is responsible for 18 percent of total global CO2 emissions, we believe that the industry needs to improve its environmental performance in order to retain its license to operate. TNT wants to lead the proactive search for new and better solutions. We feel a special responsibility in this regard.
We anticipate legislation that will enforce greener transportation. We also see increasing restrictions to stimulate clean inner city distribution, for instance in London, but also in Rotterdam and other cities.
Improving the industry
TNT has a clear interest in improving the sustainability performance of the transportation industry as a whole. To contribute, we participate in the Logistics & Transportation Sustainability Group of the World Economic Forum. We use the results of our stakeholder dialogues as input for discussions with our competitors. We also attempt to reach agreement on sustainability KPIs on which all members of this group will report. This allows customers to benchmark our industry’s sustainability performance.
The German government’s adoption of a €9.80 minimum wage in December 2007 was unexpected and a severe handicap for our business. We are contesting this minimum wage in the German courts. Such a high wage level severely hinders competitors to Deutsche Post to start competition, but more importantly, it provides a serious test for Europe’s will to fully liberalise its postal markets.
Benchmarking
We try to ensure that all we do as a company is open to benchmarking. In our business processes, we are benchmarked by our customers every day. This keeps us on our toes and focuses our learning. We apply the same dynamics (benchmark, learn, improve, benchmark again) to our social responsibility practices. We have chosen the Dow Jones Sustainability Index as a benchmarking tool. That is why we are very proud to have achieved the leadership position in this index, with the highest score of any listed company. We were also awarded the Accountancy Award 2007 for our social responsibility report 2006, presented by the Vereniging voor Milieu-Accountancy (Association of Environmental Accountancy) and Royal NIVRA.
However, these successes are no reason to become complacent. The remaining challenges in social responsibility are considerable. We will remain focused on research and innovations to continually improve our performance in this important element of doing business at TNT.
Peter Bakker, CEO
Hoofddorp, the Netherlands —18 February 2008.