ORANGE CORPORATE SOCIAL RESPONSIBILITY. Methodology note 2016 Report
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1 ORANGE CORPORATE SOCIAL RESPONSIBILITY Methodology note 2016 Report The Group has published an annual report on sustainable development and corporate social responsibility (CSR) every year since More detailed information on its commitments, impact, and social, societal and environmental performance is available online: and on the Orange group's "CSR Reporting" pages. All of the quantitative indicators are also shown. REPORTING PERIOD The 2016 report covers the period from 1 January to 31 December REPORTING SCOPE The indicators were collected, calculated and consolidated using dedicated IT tools. The data presented covers all the activities and countries in which the Group operates, unless otherwise indicated. CSR reporting covers the consolidated subsidiaries (see details of the subsidiaries covered in the database: The reporting scope for 2016 changed as follows compared to 2015: incoming countries: Morocco and Jazztel acquired by Orange Spain;outgoing countries: none. The 2016 reporting scope covers an average of 99.6% of the Group's turnover; Burkina Faso, Sierra Leone and Liberia have not yet been integrated. The coverage rate, estimated in percentage of turnover of the entities included in the scope of reporting, is given for each indicator in the environmental data table and in the social data table. REPORTING METHODOLOGY The content of the report has been drawn up on the basis of indicators selected to provide an account of the main economic, corporate, social and environmental impact of the Group s activities. The choice of these indicators was based on the recommendations of international benchmark organizations such as the AA1000 APS (2008) standard, the Global Reporting Initiative (GRI), the UN Global Compact, the OECD guidelines and the ISO standard on corporate social responsibility. Application of the principles of the AA1000 standard Our 2016 corporate social responsibility report has been drawn up based mainly on the three principles of the AA1000 APS (2008) standard (inclusion, materiality, and responsiveness), the reference for corporate social responsibility in terms of taking stakeholder requirements into account. Inclusion Identifying our stakeholders expectations is a decisive element in our process of identifying the challenges of sustainability. See the list of the Group s main stakeholders: 1
2 Materiality The selection of the most significant sustainable development issues in terms of the Group s activities takes into consideration requirements expressed by the stakeholders and an internal prioritization of the risks that is regularly reassessed. ( Responsiveness Identification of the sustainable development issues that are significant to the activities of the Orange Group gives rise to the preparation of annually reassessed action plans, presented in the roadmaps which appear on the "2016 Detailed CSR Report" page. AUDIT OF THE REPORT Like in previous years, Orange has asked one of its statutory auditors, KPMG, to verify the presence and sincerity of the social, environmental and societal information which will appear in the Executive Board's report to the Annual General meeting. Orange has also asked KPMG to perform a more in-depth evaluation of certain points (see details on the mandate in the assurance report, in the "Assurance" section of the "CSR Reporting" page), in order to obtain reasonable or moderate assurance. The most important CSR information was verified with a limited selection of contributing entities, through a combination of on-site and remote audits. This approach was completed by a particularly in-depth review of the information consolidation. This procedure is a good fit for our organisation, which has numerous sites whose impact on the Group as a whole varies widely. Information which has been externally verified is identified by inserts in the relevant report pages and, in the case of quantitative indicators, is identified with a black box moderate assurance an orange box for reasonable assurance. The conclusions of this verification appear in KPMG's assurance report. SOCIAL DATA The social reporting in this document is mainly based on an HR information system (HR-Info). For the annual report and the reference document, the HR-Info data is completed with the data from a financial IS (Magnitude). Only the HR-Info information system allows for differentiation by gender and socio-professional category. Gender distribution in management (permanent contracts at the end of the period) The rule for calculating the "management staff" indicator is based on the total active workforce with permanent contracts (CDI). The "management staff" indicator includes staff in the "senior executive" category which corresponds to the consolidation of the CCNT's (National collective convention of telecommunications) E, F and G levels. Entities outside France use a document describing each CCNT level to assign the appropriate CCNT level to each employee. Percentage of women in the "leaders" network The "leaders" network is a management network, made up of 1,086 managers at end Its members hold highly strategic positions within the Group. Number of departures The "number of resignations," "number of redundancies" and "number of departures by gender" only accounts for the departure of active employees on open-ended contracts. Temporary employee departures (inactive: extended sick leave, furlough, unpaid leave, etc.) are not included in these indicators. Training hours Reporting is currently being stabilised across the international scope. It now covers more than 96 % of current staff. 2
3 Health and safety indicators These indicators covered more than 95% of employees at end The accidents reported by the countries are in line with the local regulations. A few definitions TFRAC: the frequency rate of work related accidents (TFRAC) corresponds to the number of workplace lost-time accidents per million theoretically worked hours in the year. TGRAC: the accident severity rate (TGRAC) corresponds to the number of lost-time days per thousand theoretically worked hours in the year. The number of theoretically worked hours varies by country. It is calculated on the basis of the active headcount (full time equivalent), the theoretical number of days worked per year and the theoretical number of hours worked per day in each country where the Group operates (ILO source for the last two elements). ENVIRONMENTAL DATA The environmental reporting indicators in this document are based on a non-financial information system (Indicia). Only countries consolidated according to the rules of financial consolidation in the annual report are included in the CSR report. The reporting process is structured around quarterly reporting campaigns for the main indicators, and biannual or annual campaigns for the other indicators. The fourth-quarter figures given are real or, if the data was not available in time, estimated by the countries (note that the data from the 11 major Group countries which account for 96.4% of its turnover is not estimated). Orange France's environmental reporting covers entities which have framework agreements with suppliers or are under contract with environmental organisations, which account for the vast majority of its impact. The data presented covers all the activities and countries in which the Group operates, unless otherwise stipulated. Orange Business Services' international reporting is limited to 11 countries (117 sites) out of the 85 where it operates, excluding France: Australia, Brazil, Switzerland, Egypt, Germany, India, Mauritius, Russia, Singapore, the US and the UK. These countries account for 85% of OBS International's headcount and 64% of its occupied building surface area (in m²), except for the two following indicators: electricity consumption is reported for 257 sites in 45 countries, representing 82% of its occupied building area (in m²) outside France. company vehicle fuel consumption is reported for seven countries which account for 66% of the total number of diesel vehicles and 51% of gas vehicles, and extrapolated to cover a total of 23 countries. Energy Energy consumption by data centres and networks, which are shared with other operators, is recorded partially or fully based on the importance and availability of information. Mixed equipment consumption in France (network and mobile) is allocated to the indicator which includes network consumption excluding mobile activity. Facilities energy consumption, particularly in stores, for which the Orange group does not pay a direct invoice, is not reported. Energy consumption from urban heating plants is not recorded due to the difficulty of estimating the associated CO 2 emissions. Electricity consumption in Poland is calculated based on a sample of invoices received during the fiscal year. Similarly, the Orange France network's electricity consumption is partly based on an estimate. The Orange Spain network's energy consumption is calculated on the basis of the monthly invoicing files provided by the electricity suppliers. The energy consumption of datacenters, buildings and stores is calculated using an online control system which verifies all of the buildings' systems, including IT, air conditioning, power inverters and rectifiers. The indicator "fuel consumption (all buildings, all uses)" combines the non-vehicle consumption of domestic fuel, diesel and gas, as well as the Orange Marine fleet's heavy fuel and diesel consumption. Transport Most train and air transport data comes from the Group's travel agency, which covers more than 80 % of the kilometres travelled by employees. Local travel agents which provide reports are also taken into consideration, as well as expatriates' family travel. The GHG Protocol "short-haul" air transport emission factor (180 g CO 2/passenger km) was used for all flights (short, medium and long haul). 3
4 The train transport emission factor is based on the "Bilan CarboneTM" method when available for the country. In other countries, a standard factor of CO2/passenger km is used. Greenhouse gas emissions (GHG) For emissions related to electricity consumption, the updated January 2015 IEA (International Energy Agency) emission factors were used for all countries from The GHG Protocol and ADEME emission factors used for previous reporting years in France have been replaced by the IEA factors. For other fuel types (natural gas, domestic fuel, coal, gas, diesel and LPG), the GHG Protocol emissions factors were used. Refrigerant emissions Reporting on refrigerant emissions, included in Scope 1 emissions, is not yet exhaustive. While this category of emissions is negligible (carbon 4 study for carbon footprint), the Group is seeking to improve its monitoring. Mobiles collected The mobile collection rate is calculated on the basis of five collection channels: environmentally responsible citizen collection, mobile waste collection in Africa, Mass Market buy-back offers, Business buy-back offers, and after-sales service returns. It is calculated by dividing the number of mobile devices collected by Orange by the number of mobile devices sold by Orange through the channels it controls. Waste electronics (WEEE) collected from customers WEEE (waste electric and electronic equipment) collected from individual customers corresponds to WEEE (mobile devices, fixed devices and multimedia) collected at points of sale, sent by mail or collected by service providers on behalf of Orange. This indicator also covers Group employees' mobile phones. It includes batteries and accumulators which are part of the equipment when it is brought in by the customer, as well as other types of batteries and accumulators collected separately at the different drop-boxes. In France, WEEE from "business" customers (OBS France) is not recorded under this indicator but under the internal WEEE indicator (network). Waste evacuated and waste recovered Reporting on waste uses the concepts of waste evacuated (i.e. waste which is no longer stored on the Group's premises or is no longer handled by the Group and has been transferred to an external service provider or organisation with or without financial gain), and waste recovered (i.e. waste which is recovered in the form of re-use, recycling, or material or energy use). This distinction is applied to European countries. For non-european countries, given that there is frequently no identified waste treatment channel for certain types of waste, the quantities of recovered waste concern, in broader terms, all evacuated waste which was sold. Waste indicator reporting is not exhaustive due to the ongoing work on identifying and stabilizing waste collection and processing channels in the MEA zone, as well as difficult access to outsourced contract data for network operation in certain European countries Ordinary waste has not been taken into account since 2012, with the exception of France, where in 2015 some ordinary waste covered by framework contracts was taken into account for reporting on other non-hazardous waste. "Neon," "PCB" (polychlorinated biphenyl) and "printer cartridges" are included in "other hazardous waste." For OBS, WEEE which is reused is counted as recovered. Action plans have been established to make this reporting more exhaustive. In France, waste generated by the phone booth destruction programme is included in the following indicators: "Other non-hazardous waste": all aluminium, stainless steel, steel, and glass; "Network WEEE": all WEEE. In addition, for tertiary and network waste excluding WEEE in France, only waste that is handled by a service provider which has signed a framework agreement with the France Telecom Group is included in reporting, with the exception of wiring and other hazardous waste (including sludge and oily water) from Orange Marine and a limited amount of waste from Orange Marine. 4
5 Different specialist contractors are used, depending on the type of waste in question (copper cables, paper, network equipment, batteries, wood poles, etc.). Special attention is paid to wooden poles in order to ensure that they are not reused, in line with restrictive regulations, and to ensure that they are correctly disposed of. For leased sites, household and similar waste is not reported, since it is managed by the property owner. Water The main areas of water consumption within the Orange Group are water fountains, sanitary facilities, company canteens, and data centre humidifier systems. Company canteens are exclusively managed by the Works Committees, and do not fall within the scope of the Orange Group, subject to penalties for unlawful interference. Following an evaluation of the volumes involved, the Group believes that these are not significant enough to justify the implementation of a restrictive and verifiable process for water consumption consolidation and verification. The decrease seen in 2016 compared to previous years is due to incomplete reporting by certain countries. Environmental management system The KPI "Group ISO Certification Rate" is the ratio of electrical energy consumed by the ISO14001 certified scope to the total electrical energy consumed by the Group. It is calculated for the scope of consolidated Group organisations. For France, due to the existence of process certifications for which the energy consumed is irrelevant, combined with site certifications, a different formula is used: total headcount working in the certified scope divided by total France headcount; ratio applied to total electrical energy consumed in France (excluding Orange Marine), enabling the obtention of an "equivalent" energy which is aggregated with the figures obtained for other Group organisations. This equivalent electrical energy value is aggregated with that of Orange Marine (fully certified) then with that of the other certified consolidation scopes in the other organizations of the Group; the whole is then divided by the total electrical energy consumption of the Group to provide the KPI. CET (CUSTOMER EXPERIENCE TRACKER) The published indicator corresponds to the average Orange customer ratings in answer to the following question "[...] Would you recommend Orange mobile/high-speed internet to your friends and family? " Respondents give a rating from 0 to 10. The results are averaged and are multiplied by 10 to obtain a score out of
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