Patrick Mallon Creating change through Collaboration & Partnership 22 May 2007

We are Unique movement of 750+ member companies Our purpose INSPIRE, CHALLENGE & SUPPORT, business to continually improving its positive IMPACT on society Together our members employ 14.7 million people across 200 countries. In UK members employ over 1 in 5 in the private sector workforce

25 Year’s – In Partnership Partnership is at the heart of BITC Partnership underpins Membership 3 Membership Commitments = Inspire, innovate & lead by sharing learning & experience = Impact on key social issues through collaborative action in areas of greatest need = Integrate, manage & measure responsible business

BITC’s brand of Partnership All our major campaign areas driven by Leadership Teams. All initiatives developed in partnership with Business Product development done in partnership - - Examples include the Environment Index and CR Index and Leadership Matrix tool

BITC Impact companies involved in BITC Leadership Teams 877 Business Leaders involved in “Seeing is Believing” 8,000 participants in events 829 companies took part in BITC Benchmarking

BITC Impact ,343 people volunteered in schools & communities 1,665 volunteers partnered young people on our “Number Partner Programme” 800+ professional firms completed 1,600 pro bona projects & provided £2.3m worth of advice to 1,300 local community groups 324 companies helped to save 14,000 tonnes of CO2 & cut costs by nearly £1.8m

Critical Success factors – Partnership on the Ground Leadership & ownership by the private sector Numbers of businesses involved Senior leadership Shared objectives/mutual benefit Dedicated brokerage/project management Strong local management structures Task focused projects Clear evaluation processes in place Flexibility and ability to change

TOOLS - CR Index contributing to change Greater emphasis of CR as a source of competitive advantage - Leaders moving from Risk to Opportunity. Board-level ownership more prevalent & visible. Further progress in systems & programmes to incentivise, train & communicate with employees. More companies involving stakeholders in identifying risks, opportunities and performance indicators.

TOOLS - CR Index contributing to change More evidence of social & environmental issues influencing decision making – on new investments; development of new products & services (But often isolated examples) Trend of public disclosure continuing

Tools - Areas for improvement Limited forward-looking commitments – outlooks rarely extend beyond the year ahead. Supply-chain management a key area for improvement Demonstrating continuous improvement in social and environmental impact proving an enduring challenge. Only 2 in 5 companies have company wide assurance processes Climate Change - companies still focusing their efforts on incremental yearly improvements.

Tools – Going Beyond the CR Index - Leadership Matrix (KPIs) Attained CR Index practice Current leadership practiceFuture leadership practice Strategy: Leadership & advocacy Risk management process Stakeholder engagement Input to business planning KPIs based on Materiality, Risk & Strategy Assessment of CR risks based on “likelihood of risk happening vs financial impact to business over 3 year period” CR issues aligned with stakeholder engagement CR Strategy & Business strategy operates as one. CR risks appear on overall business risk registrar. CR risks/opportunities central to the long-term (strategic) planning of the business (longevity/sustainability). Integration: (Strategic) decision making Performance mangt & remuneration Training & development Senior management have non- financial KPIs in personal scorecard & remunerated accordingly. Governance of KPIs operates within a framework which ties day-to-day issue owners to senior managers. Robust materiality process in place Strategic business decisions delivering market transformation through addressing route cause – e.g a company’s contribution to “low carbon economy”

Attained CR Index practice Current leadership practiceFuture leadership practice Management: Performance targets Measurement Performance reporting (internal/external ) Small number of indicators. Performance improvement targets linked to stakeholder groups – Customers, Employees, suppliers, communities etc. Report only on issues significant to company & to stakeholders & society.  Targets focusing more on opportunity than risk. Measurement & reporting of transformational change in business model & performance. Step change rather than incremental. Forward looking rather than historical.  KPIs bolster business KPis. Impact: Performance improvement Effecting wider change (‘influencing the future’) Year-on-year performance improvement. Numerical & time-bound targets. Performance improvement that delivers measurable value to business and society. A company’s contribution to “low carbon economy” and its contribution to business’s sustainable economic growth. The bar is set for others to follow. Tools – Going Beyond the CR Index - Leadership Matrix (KPIs)

Most Recent Partnership HRH The Prince of Wales - May Day Climate Change Summit Partnership between BITC, Carbon Trust, Envirowise, Regional Development Agencies & Business Pledges to Action by Business