HBOS PLC
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HBOS and the Environment
We are committed to having a positive influence on the environment. Our primary concern is to reduce emissions and our use of resources. We are committed to achieving carbon neutrality in the UK by the end of 2007.
HBOS impacts on the environment in two ways:
- 1. Directly through the energy and resources we use in our buildings and when we travel.
- 2. Indirectly through the products and services we provide to our personal and commercial customers
With over 2,200 buildings in our UK property estate, over 65,000 employees and a relationship with approximately two out of every five households in the UK, we must manage this impact effectively.
HBOS has reduced its UK carbon emissions by almost two thirds (65%) from 163,000 tonnes in 2004 to 57,000 tonnes in 2006. This is primarily due to purchasing 100% renewable energy. We are currently the only UK bank to do this.
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Carbon Neutrality
HBOS Commits to Carbon Neutrality by the end of 2007 "Committing to carbon neutrality in the UK is a major initiative. Offsetting our residual emissions is just a small part of our strategy. Our primary concern has been and remains to reduce the emissions we make in the first place." Andy Hornby, Chief Executive.
Since 2004, HBOS has reduced CO2 by nearly two thirds (65%), from 163,000 tonnes in 2004 to 57,000 tonnes last year. This reduction is equivalent to the emissions generated by 17,500 homes in a year.
Our Commitment to Carbon Neutrality
- HBOS' UK electricity needs are powered by 100% renewable energy contracts from sources such as wind, hydro and tidal power.
- HBOS will launch a "Green Miles" initiative designed to slow growth in business travel. This programme will incentivise colleagues to travel only when it is essential. A percentage of the travel saving will be donated to the HBOS Foundation's Million £ Challenge charity, currently the British Heart Foundation .
- HBOS will offset its UK emissions through Certified Emissions Reductions delivered in developing countries. This follows the process set out in the Clean Development Mechanism of the Kyoto Protocol
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The Green Miles Initiative
Launched at the beginning of April 2007, Green Miles is designed to reduce the rate of HBOS business travel growth in the UK. The Million £ Challenge could benefit by up to £500,000 from the savings made.
Business travel is the biggest cause of carbon emissions in HBOS. The aim of Green Miles in 2007 is to halve the rate of travel growth – a saving of 5.5 million miles or 225 times around the world. Doing so will reduce the Group's potential carbon emissions. This will be achieved by better use of teleconference facilities across our business.
Green Miles has been piloted within Group Services. The results of this pilot exceeded all expectations. As a result, the Million £ Challenge gained £50,000, matched by the Foundation to a total of £100,000.
Green Miles currently concentrates on journeys made by train and plane. It is planned to include cars from 2008. The miles saved when colleagues choose not to take a business journey all count towards the Green Miles target.
A Carbon Calculator has been created to help colleagues estimate their typical carbon emissions from business travel. Instead of asking colleagues to travel longer by train or driving, Green Miles encourages colleagues to question whether they need to travel at all.
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HBOS Environmental Management
HBOS has a comprehensive Environmental Management System (EMS) with targets for energy use, water use and recycling. Here are some of our current initiatives to help meet these targets:
Paper reduction and recycling:
- We have rolled out improved recycling facilities to call centres and offices with over 200 colleagues.
- We will implement new recycling facilities for all waste paper across our entire branch network by the end of 2007.
- We are working with Greenworks , a not-for-profit partner to improve our recycling of office furniture.
- We will introduce recycled plastic bags for customers in the branch network.
- Around 1 million of our customers have moved to paper-free, electronic statements in a bid to reduce paper use.
- HBOS will continue to work in partnership with suppliers to identify environmental efficiency initiatives in new buildings from the tender process onwards.
Other initiatives:
- HBOS will launch a "Green Mortgage" next year to help its customers reduce their impact on the environment.
- In 2002, HBOS was the first bank to recognise the risks posed by flooding and to offer all its mortgage customers cover against flood risk until 2008.
- HBOS has installed long life, low energy light bulbs across over 80% of our estate. The remaining light fittings are currently unsuitable for low energy bulbs and will be upgraded over the next 5 years as part of our building refurbishment programme.
- HBOS is a key sponsor of the WWF's One Million Sustainable Homes Initiative .
- HBOS has adopted the Equator Principles for project finance. The Principles require a commitment to fund only projects which can be developed in a socially and environmentally responsible manner.
- Insight Investment , our asset management division, manages the Evergreen Fund that has a 20% weighting towards investment in companies that develop environmentally beneficial products.
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The Group's Environmental Policy
The Group recognises that it has a responsibility to the environment and we will take positive steps to address the environmental impacts of our business operations. These impacts are both direct and indirect, and include our operational impacts and the impacts associated with our business activities, such as investment and lending. We will seek to minimise our adverse impacts through good management, aiming for continuous improvement in our environmental performance.
The Group is committed to the prevention of environmental pollution, and we regard compliance with the relevant environmental laws in the countries in which we operate, as a minimum standard. Furthermore, we will seek to implement good practice wherever practicable.
Responsibilities for environmental management are delegated to the Divisional Chief Executives and Heads of Group Functions.
Recognising our responsibilities and commitment to the environment, the HBOS Group undertakes to:
- Understand and address the direct and indirect environmental impacts of our operations.
- Continue to measure our most significant environmental impacts, set realistic targets for improvement, and monitor progress, using formal auditing procedures where appropriate.
- Support the integration of environmental considerations and objectives into our business decisions.
- Make efficient use of natural resources and adopt effective waste management procedures.
- Ensure that our employees have an awareness of environmental issues, and that those with particular environmental responsibilities are provided with appropriate training.
- Continue to ensure that environmental considerations are included in our risk assessment procedures for commercial and retail customers.
- Demonstrate to customers through our business decisions, our attitudes to risk, and day-to-day operations in our markets, that we support sound environmental principles.
- Integrate environmental considerations into our procurement of goods and services.
- Regularly review this policy and make it available to all our stakeholders.
- Publish information about our environmental performance for the benefit of our stakeholders.
The Group supports the principles of sustainable development. We will manage risks effectively and seek to realise the opportunities arising from proactive management of our environmental, economic, and social responsibilities, to create long-term shareholder value.
Corporate Environmental Objectives
To ensure that the Group meets the commitments set out in this environmental policy, we have set out a number of long term objectives for the environment programme over the next five years. They are reviewed annually, and published on the Group website, www.hbosplc.com/community and internally in a range of media. The Group Corporate Objectives are to:
- Maintain a comprehensive environmental management system (EMS) throughout the organisation.
- Review the direct environmental impacts of our business to identify and, where practicable, measure adverse impacts, setting appropriate environmental improvement targets and monitoring progress
- Use energy and water efficiently and optimise our use of natural resources.
- Minimise the volume of waste deposited to landfill by re-using and recycling materials wherever possible, or by identifying the best practicable environmental options for disposal.
- Ensure that our colleagues are aware of relevant environmental issues, and of their own roles and responsibilities in delivering the overall programme, providing training for those with particular responsibilities.
- Continue to consider environmental factors and risks in our commercial and retail lending decisions, alert our customers to the importance of these issues, and direct them to specialist sources of advice. These are set out in a Lenders' Guide.
- Encourage the development of products and services, e.g. through the development of new socially responsible investment products, that will help our customers to adopt sound environmental principles and practices.
- Ensure that our key suppliers and contractors are aware of our policy, and that wherever possible, they operate to similar standards, as a minimum.
- Continue to provide support for sustainability initiatives that contribute towards the preservation or enhancement of the quality of life in the communities in which we operate.
- Review and monitor our environmental programme on an annual basis, including the relevance of our policy and objectives, and identify examples of best practice that may be shared throughout the Group.
- Collate and publish relevant information about our environmental performance on an annual basis, in print and web-based formats.
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Environmental Section of the 2005 HBOS Corporate Responsibility Agenda
Delivering value to the environment
We set ambitious performance targets to improve our environmental performance and to minimise harmful impacts. We are committed to having a positive influence on the environment. We strive to improve our environmental performance by operating effective management processes, identifying new opportunities to minimise our harmful impacts, and setting ambitious performance targets. We are also committed to encouraging our colleagues, customers and suppliers to minimise the harmful impact of their activities on the environment.
Key issues for the financial services sector and for HBOS In common with the rest of the financial services sector, HBOS impacts on environment in two ways:
- Indirectly through the products and services it provides to personal and commercial customers.
- Directly through constructing, maintaining and operating its buildings.
With over 2,200 buildings in the HBOS property estate (including 1,430 branches in the retail network, 21 call centres, Customer Service Centres and Retail contact centres, and over 100 other major employment sites), we must ensure that this is managed effectively. Providing and maintaining a healthy, safe, and professional environment for colleagues to work in is essential in supporting the core business of HBOS operations.
The impact of increased energy prices and the climate change levy on UK businesses are both of concern to us. But the adverse effect these can have on competitiveness and profitability also highlight the importance of implementing energy efficiency initiatives to reduce consumption.
Implementing the HBOS Environmental Policy We have an Environmental Management System (EMS) based on the environmental standard ISO 14001. Due to the advice of independent external consultants, HBOS has decided that external certification to ISO 14001 would currently not add value to our environmental programme. However, we plan to review this situation in 2006.
The significant environmental impacts associated with operating our buildings are assessed using the Building Research Establishment Ecopoints system. This shows that energy consumption accounts for around 71% of our direct impact on the environment, followed by paper consumption and business travel. The production of general office waste produced by colleagues while they work, such as food packaging and plastics, together with water consumption, accounts for less than 1% of HBOS’s direct impacts. Environmental impacts Corporate Environmental Objectives linked to HBOS’s significant impacts are published alongside our Environmental Policy Statement on Groupnet (the HBOS intranet) and on our external web site. Management and performance targets addressing HBOS’s significant operational environmental impacts are set following audits and the management review conducted annually by independent external consultants. Performance against targets is reported in the annual report to the Board on the Environmental Strategy and here, in our Corporate Responsibility Report. HBOS provides internal environmental communications and training designed to raise awareness of environmental issues and educate colleagues in how they can address these at work and at home. This information is delivered to colleagues via a range of media including Group-wide and divisional intranets, e-magazines, divisional hard copy magazines, presentations, seminars and workshops. We then gauge our colleagues’ views on the effectiveness of our environmental programme in monthly and annual Colleague Opinion Surveys conducted by MORI. How we deliver on our responsibilities Group Property is responsible for managing the environmental impacts – energy, water and waste – associated with running the HBOS property estate. HBOS Procurement advises the business on the environmental impacts associated with business travel and paper/print use, and works with suppliers to improve their environmental performance and the environmental performance of HBOS. Facilities management review Facilities Management delivers a range of services including property maintenance, cleaning, waste management, and the provision of utilities to the HBOS portfolio. In 2005, Group Property began a comprehensive review of the delivery of Facilities Management within HBOS. Once the new arrangements come into force in 2006, the FM Forward project may change the way energy, water, and waste are managed and affect the achievement of our targets. Further information on how this initiative affects the management of our environmental impacts will be published in the next Corporate Responsibility Report. Water consumption 0.4% General office waste 0.6% Business travel 7.0% Paper/print consumption 21.0% Energy consumption 71.0% The HBOS Report 2005 Our corporate responsibility agenda 44 Energy and water Reducing consumption and emissions Our initial targets to reduce energy consumption and CO2 emissions by 10% per full-time employee (FTE), and reduce water consumption by 6% per FTE for the period 1 January 2002 to 31 December 2004, have been exceeded. Energy consumption decreased from 8,335 kWh/FTE in 2001 to 7,425 kWh/FTE in 2005; CO2 emissions decreased from 2,971kg/FTE in 2001 to 2,620kg/FTE in 2005; and water consumption decreased from 8.82m3/FTE to 8.33m3/FTE in the same period. Total savings from energy efficiency initiatives implemented since 1998 are over £16m, with a reduction of over 133,000 tonnes in CO2 emissions across the Group. In 2005 a two-day workshop was held to review the future of the HBOS energy strategy. Attended by colleagues from across HBOS, internal and external specialists, The Carbon Trust, and The Building Research Establishment, the workshop focused on proposals to manage costs and control CO2 emissions, and ways to have a positive influence on our key stakeholders. New targets have been set, to reduce energy consumption by 17.5% per FTE and reduce water use by 10% reduction per FTE for the period 1 January 2002 – 31 December 2007. Carbon Disclosure Project Leadership Index For the second year running, the Carbon Disclosure Project ranked HBOS as a leading company in tackling the issues of climate change. In 2005 we were placed in the CDP Leadership Index of the top 50 companies in the world in addressing these issues. Energy efficiency accreditation HBOS’s achievements in reducing energy-use were recognised when it was re-accredited to The Carbon Trust’s Energy Efficiency Accreditation Scheme in 2005. The Scheme is the UK’s only independent award recognising achievements by leading organisations in industry, commerce and the public sector. Re-accreditation is required every three years and performance is independently audited under a number of key areas such as management commitment, investment in energy measures, and improvements in energy efficiency. New energy contract We also signed a new contract with our electricity supplier in September 2005 to provide 100% climate change levy exempt electricity. This contract will end in October 2006. Travel In 2005 the amount of business travel totalled 78.6 million miles, accounting for around 7% of HBOS’s direct impact on the environment. Of this, 4% of travel was conducted by rail, 54% by air and 42% by road, creating around 20,249 tonnes of CO2. Until mid-2004 models based on historic data were used to estimate business travel. In order to assess changes in environmental performance, we will conduct trend analysis when actual data has been obtained for more than two years. Travelling to work In 2005, we conducted a travel survey at our major employment sites in West Yorkshire. The data will help us meet our colleagues’ travel needs in a way that also reduces our environmental impact. In addition to the existing schemes in place across the Group, we also established a new car-share scheme in Calderdale. 2001 2005 Target achieved? Energy consumption 8,335 KWh/FTE 7,425 KWh/FTE Yes CO2 emissions 2,971kg/FTE 2,620kg/FTE Yes Water consumption 8.82m3/FTE 8.33m3/FTE Yes FTE = Full Time Employee Calderdale Car Share Scheme Calderdalecarshare.com was set up by Calderdale Council and HBOS to provide a free carsharing service for all those who live, work and travel in and around Calderdale. The site matches drivers with potential passengers. Once matched, people can choose to share as little or as often as they like, with whomever they like. The benefits of carsharing include: • Free to use – simply share travel costs. • Saves money – enables individuals to reduce transport costs by up to £1,000 a year. • Reduces the number of cars on the roads – resulting in less congestion, less pollution and fewer parking problems. • Provides a real solution to the transport problems of rural areas. • Gives employees and employers more transport options. • Reduces the need for a private car. Environment – Delivering value to the environment (continued) The HBOS Report 2005 Our corporate responsibility agenda 45 Company fleet The CO2 emissions profile of the HBOS fleet is decreasing year-on-year due to better vehicle design and reduced CO2 emissions in those vehicles regulated by EU emissions legislation (e.g. Euro IV). In addition, the HBOS fleet is replaced every four years, contributing to a lower overall emissions profile. Waste and resource use General office waste such as plastics, food waste, and broken stationery represents less than 1% of HBOS’s direct environmental impact. Unfortunately one legacy of contracts predating acquisitions and mergers is that there are a number of different waste management schemes in place across the Group. The FM Forward facilities management review will aim to standardise the Group’s waste management infrastructure and reporting mechanisms. Our current model for estimating waste indicates that the amount of general office waste increased from 226 kg/FTE in 2001 to 236 kg/FTE in 2005. HBOS achieved a recycling rate of 44% by the end of 2005, an increase of almost 4% compared to 2001. Paper and print In 2005, HBOS consumed around 17,000 tonnes of paper and print, equivalent to 289 kg/FTE. A number of specific projects were carried out in 2005 to reduce cost, and minimise the harmful environmental impacts associated with consuming paper, print and other resources, and the production of wastes. Equipment and consumable recycling Group Services division runs a number of recycling initiatives that benefit community groups throughout the UK. As part of this, a proportion of redundant IT equipment is made available through colleagues for donation to local charities or community groups. Donations are made to organisations whose requests support the HBOS Foundation criteria of money advice and financial literacy. They must also be developing and improving local communities, and the equipment must be destined for use by a group of people or the wider community. Mobile phones In the UK only around a quarter of the 15 million unwanted mobile phones are returned for recycling or environmentallyefficient disposal. Annually, this leaves over 11 million phones unused or destined for landfill where they take about 1,000 years to decompose. However, a lucrative second-hand market exists for discarded mobile phones, and many are repaired, refurbished, rebranded and sent for reuse in eastern Europe, Asia and Africa. To support this, HBOS has set up a freepost service so that colleagues can send unwanted or broken mobile phones and equipment to Fonebak where they will be sorted for reuse or recycling. For every reusable phone sent to Fonebak, our mobile phone supplier Vodafone donates £5 to the Million £ Challenge. This is then matched by the HBOS Foundation. Disposing of printer cartridges HBOS has been using remanufactured toner and inkjet cartridges for a number of years, and toner recycling schemes are in place in the HBOS retail network and major employment sites in West Yorkshire. Marketing literature The All Branch Distribution (ABD) process provides the Retail network with marketing support literature, including campaign support material, product updates and regulatory amended literature. Following a successful pilot in 2004 to reduce the amount of literature sent to branches, print savings of £450,000 were achieved in 2005, in addition to reductions in packaging waste and literature disposed of as waste. Further process efficiencies identified during the pilot resulting in additional print savings of 13%. A six-month pilot in 30 branches began at the end of November 2005 to identify the cost and environmental implications of disposing out-of-date marketing literature currently with confidential waste, rather than sending it to landfill. All confidential waste is shredded and recycled. If the pilot is successful it will be introduced across HBOS in July 2006 and will make a significant contribution to us achieving our target of recycling 60% of general office waste by the end of 2007. Environment – Delivering value to the environment (continued) The HBOS Report 2005 Our corporate responsibility agenda 46 Empty cartridges have a monetary value and the value of all HBOS purchased cartridges returned for recycling is matched by the HBOS Foundation. The proceeds are then donated to the HBOS Million £ Challenge. In 2005, the HBOS office equipment, mobile phone and printer cartridge initiatives raised around £28,000 after being matched by the HBOS Foundation Reducing printer numbers Based on research and best practice from companies similar to HBOS, it was identified that one printer can be shared between groups of at least 20 (for black and white printers) and 100 colleagues (for colour printers). To rationalise the number of printers used, reduce purchasing and maintenance costs, and achieve savings in consumables such as paper and toner, we began a removal programme for printers that were surplus to requirement, starting with the oldest. Now, when they reach the end of their lifespan, some printers are simply not replaced and redundant printers are disposed of by HBOS’s IT waste contractors for responsible disposal, recycling, or refurbishment and reuse. Raising awareness HBOS is committed to raising colleagues awareness of environmental issues and explaining how HBOS is managing its environmental impacts effectively. Top-level presentations In addition to receiving annual papers on the progress of our environmental strategy, presentations are made to HBOS and Divisional Boards on key corporate responsibility and environmental issues. In 2005, for example, a presentation on global environmental issues such as climate change was given to the HBOS Board. Global Action Plan website HBOS sponsors the ‘Greenscore’ website of Global Action Plan, an environmental charity. This allows colleagues and customers to rate their environmental performance at home, learn how they can measure their effect on the environment, change their lifestyles, and reduce their negative impacts. 34% Colleague advocacy of our environmental programme rose from 29% in 2004 to 34% in 2005 Sustainable Housing project Work also continued on the Sustainable Housing project, a campaign showcasing HBOS’s commitment to environmental good practice. Early in 2006, colleagues were given the opportunity to win a ‘green home make-over’ by taking part in an on-line survey about their homes and their current energy usage. Energy Saving Week HBOS also promoted Energy Saving Week, an Energy Saving Trust initiative that raises awareness on climate change and general energy use. Colleagues were also encouraged to replace travel with audio and video-conferencing facilities. During European Mobility Week they were also encouraged to use free bus travel. Measuring awareness We measure colleagues’ views on the effectiveness of our environmental programme, in monthly and annual Colleague Opinion Surveys conducted by MORI. Colleague advocacy of our environmental programme rose from 29% in 2004 to 34% in 2005. Online banking HBOS won the 2005 European Banking Technology Award for its facility of online documents. At least 790,000 customers now receive their bank statements and letters electronically. This is equivalent to around 8 million documents. By switching off the option to receive paper-based communications through the post, customers can now receive many banking statements, letters, and regular savings statements electronically. Paperfree customers can store their statements online for two years, download them into money management tools, and still print them off if they wish. This initiative resulted in savings on paper and postage amounting to £1.2m in only seven months, and will apply to other product areas in due course. Environment – Delivering value to the environment (continued) The HBOS Report 2005 Our corporate responsibility agenda 47 Delivering value to the environment Where can we do better? • Colleague advocacy As recorded in the annual Colleague Opinion Survey, the number of colleagues who would speak highly of the way HBOS protects the environment remains low – below 40% for two years running. • Travel The costs and environmental impacts associated with our business travel are increasing year-on-year. However, in 2005 work began an environmental programme called Green Miles. By promoting alternatives to travel and encouraging colleagues to reduce travel, we aim to reduce business travel costs and CO2 emissions, improve colleague well-being, and generate savings that can then be donated to the HBOS Foundation’s Million £ Challenge. • Recycling We were not successful in reaching our target to increase recycling of general office wastes to 50% for the period 1 January 2002–31 December 2005. With a new target in place, to recycle 60% of our general office waste by 31 December 2007, we plan to increase internal communication activity to raise colleague awareness of good practice. The Facilities Management Forward review and the recycling pilot taking place over 2006 will identify opportunities to standardise the Group’s waste management and reporting mechanisms, and increase HBOS’s recycling rate. • Energy efficiency Implementation of the EC Directive on the Energy Performance of Buildings will create cross-sector systems for measuring the relative energy performance of different buildings. It will also result in improved energy efficiency in large buildings that have been upgraded, and it will improve the energy performance standards for new buildings.
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