BT invited a number of analysts to attend its Sustainability round table on June 25th 2009 at the BT Tower. Fielding an impressive set of senior executives the company led by Dinah McLeod who heads up its dedicated Sustainability practice. I hadn’t been to the Post Office (as was) Tower since the 1970s. At one time the tallest building in London it – like Concorde – is a witness both to 1960s technical optimism and, having survived an attempt to blow it up in
the 1970s, also to its own sustainability.
BT Backgrounder 2009
British Telecom (BT) is a major European Telecoms supplier. Like others it came from a division of nationalised post office and telecoms businesses. It currently has around 108k staff. It has four main divisions – Retail, Wholesale, Openreach and Global Services (the comparative revenues of Global Services and other divisions is shown in Figure 2). 
The dramatic fall in the value of the pound (£) against other currencies since the summer of 2008 has made BT’s results look stronger than the UK economy – it posted a 1% growth to £5,473 million in Q1 2009. However, it has done less well than its regional competitors when we convert their revenues to pounds (£) as we can see in Figure 3. As a large, previously nationalised company BT is more used to offloading businesses (such as its Mobile phone division to create O2 in 2002 – now part of Telefonica). It is also very different to major American ITC companies who virtually define themselves by the acquisitions they make. In any BT has made a number of purchases in the last couple of years. In particular:
- In 2007 it acquired dabs.com (an online IT retailer), PlusNet (an ISP) and International Network Services (INS) – an IT consulting and software supplier.
- In 2008 BT acquired i2i Enterprise (an Indian IP communications services supplier), Comsat International (a data communications services supplier in Latin America), Frontline Technologies (an IT services supplier in Asia Pacific) and the IT infrastructure division of CS Communication & Systèmes in France.
- BT Italia (formerly Albacom) also completed the purchase of I.NET, an Italian data services provider.
I believe BT would have done much better if the British government hadn’t constantly handicapped it through de-regulation. For instance it was forced to off-load its mobile phone business (to form O2 in 2002). The revenue growth of other Telecoms vendors has typically been driven from this area – in the case of Telefonica with the addition of O2 itself.
BT Global Services Approach To Sustainability
Keen readers of my blog will have seen that I promised to investigate BT’s approach from a number of angles.
- Global Services approaches sustainability from the point of view of business opportunities rather than CSR. Dinah also tried to avoid Fear Uncertainty and Doubt (FUD) arguments, although she did talk about the current thinking on accelerating temperature change and the expected rise in sea levels.
- It is building sustainability business by working with organisations in advance of the British government’s carbon emissions legislation. It is keen to include employee’s travel to and from work in its Carbon Impact Assessments, which means it becomes a strong supporter of flexible employment (an important CSR activity).
- In its own Call Centre services it is a supporter of ‘homeshoring’ that allows work from home, supported with technologies such as BT’s 21st Century Network (21CN). While locating Call Centres in countries such as India in recent years led to mass unemployment in Britain in the Finance area, homeshoring – if successful – could actually help to bring some of them back.
- BT’s story in its Data Centre services is very familiar to anyone following the trends in servers and data storage in recent years. It is a strong component of physical and virtual consolidation, as well as the use of innovative cooling techniques (such as local water). It uses its own activities as an example of what can be achieved, citing its St Alban’s facility as one of its most sustainable. In future I believe BT will link its sustainable Data Centre messages more closely with Cloud Computing – the theme of the moment.
- In the Unified Communications area BT supports the use of video conferencing for cost saving and CSR (travel avoidance is a major method for reducing carbon emissions). It made some interesting points about the need to mix ‘n’ match the different types (from Telepresence to PC based personal videoconferencing), as well as the need to extend video conferencing beyond merely internal activities. Among other activities it has collaborated with Microsoft, Cisco and others. It has also launched its Global Video Exchange to help inter-company video conferencing.
- BT is a major supplier to the UK National Heath Service (NHS)’s N3 computerisation project, providing communications and also acting as a service aggregator for suppliers such as Virgin Media and Cable and Wireless. BT points out that the NHS is the UK’s largest CO2 emitter with a calculated 18m tonnes per year. It offers many examples of how it is helping the organisation become more sustainable – for example reducing paper use in prescriptions and X-rays, and providing video conferencing for consultants in Kent leading to a reduction in the need to move patients to London for heart operations. BT believes it can help the NHS meet its CO2 reduction targets of 26% by 2020 and 80% by 2050.
Overall BT’s key message from the event was that it wants to help organisations build sustainable business.
Corporate And Social Responsibility And Sustainability
I believe that ‘Sustainability’ is to services companies as ‘Green IT’ is to hardware suppliers. It can be part of a Corporate and Social Responsibility (CSR) strategy in a number of ways. In particular it can:
- Allow an organisation to address the environment as a stakeholder
- Address issues beyond mere short-term financial return
- Help in the development of unique practices beyond mere compliance with government legislation
In a world in which companies tend to behave in identical ways, embracing sustainability offers a chance to differentiate. If handled sympathetically it can make a company’s activities attractive to those who believe that human activities threaten the survival of the planet. However not everybody shares the same concern for the environment and suppliers should, as far as possible, avoid ‘political correctness’ in their approaches. The UK government has enacted several laws forcing companies of a certain size to account for their carbon emissions. Some of these are not very logical. For instance:
- It currently does not take account of alternative electricity usage in assessing carbon footprint. Ironically this means any organisation using non-fossil fuel is – by definition – pursuing a CSR strategy.
- It doesn’t force companies to account for the carbon footprint of outsourced business. At a time when unemployment is growing everywhere, UK jobs would be better protected if they were.
Understanding the compliance issues will become increasingly important – at least if the current recession doesn’t force the issues off the agenda. As a British company BT understands better than most how to make money from helping its customers address the legal requirements. However in themselves these services should not be considered CSR.