2015 goals

Think Big - Our progress

Our 2015 Goals

We're conscious that, as well as our performance against individual commitments, our stakeholders are interested in how we're progressing towards our three overarching goals. We touched on this in our 2012 report and, two years into our Blueprint journey, can reveal that progress towards the goals is generally positive.

Strong progress was made in 2013-14 towards helping 1 million young people gain skills for life and encouraging 10 million customers to live in easier and more sustainable ways. We remain on track to achieve both goals by the end of 2015.

We are moving towards our goal of delivering carbon benefits to customers that are ten times the impact of our network. However, it is very unlikely that we will meet this goal within the three year timeframe of the Blueprint.

Addressing the challenges

Our business is successfully moving towards what is sometimes referred to as a 'carbon positive' position and will work hard to maintain this. But this goal presents real challenges, among them: how we find the right products and services that will spur consumer behaviour change on a significant and widespread scale. We will continue to look for opportunities to collaborate with like-minded organisations to help meet these challenges over the coming months and beyond.

Reporting accurately

It's important to point out two provisos in the 2013-14 performance update.

First, quantifying the carbon benefits of our services versus the carbon impact of our network is far from simple. We are working with external experts to assess our progress accurately, but it is complex, with many stakeholders involved.

Second, the numbers and progress reporting presented here have not been verified externally. In our next report, when we will be at 2015 year-end, third party assurance on both our goals and commitments will be provided. These current numbers therefore represent our own estimate (supported by the work we are doing with the Carbon Trust) of progress against our goals to date.

In addition, here is an update on progress towards the 40 commitments that underpin the goals. We can reveal that 21 are on target or achieved; 11 require more work; and 8 are not being progressed or are unlikely to be achieved by 2015, due to changing market conditions and, most significantly, the closure of O2 Health.

THINK BIG FOR PEOPLE

Help 1 million young people develop skills for life and lead community projects across the UK by the end of 2015

On track

We are making good progress towards this ambitious target, having supported 665,000 young people up to June 2014, and we've launched innovative schemes to help us reach our 1 million target by 2015.

Much has changed since we first set this goal, spearheaded by our original social action and employee mentoring scheme – Think Big Youth.

Although youth unemployment has peaked in the UK and is now showing a gradual decline, a lack of work readiness, poor social mobility and our starting point – to tackle the poor public perception of young people as reported in our 2012 Youth Matters survey – continue to affect employment opportunities and self-confidence for young people.

In addition, in 2013 we conducted independent research into UK plc's digital skills gap, finding that as many as 745,000 more digital-savvy workers will be needed by 2017.

Young people are perfectly placed to fill this gap. As the first generation to grow up with the internet, they are more connected than ever, communicate in real time via digital media of their choice, and create, curate and consume electronically. Employing young people will have the double benefit of boosting the UK economy and supporting business growth while lifting digital natives – those who naturally live and work in a connected world – out of unemployment.

We realised, too, that to achieve our target we needed to evolve and expand our youth programmes. Following the successful pilot of our Think Big School programme, we rolled it in 2013 and 2014, engaging over 5,600 secondary school students across the UK and teaching them the building blocks of the web.

We also launched GoThinkBig.co.uk in partnership with Bauer Media, to provide high quality careers advice and thousands of work experience opportunities in over 30 UK businesses, including our own.

And we held Telefónica's digital technology festival, Campus Party, at the O2 Arena, introducing young people to digital innovation and inspiring them to consider tech and digital careers.

Since then we have opened the Think Big Hub in London, a fully-connected dedicated space where young people can work, hold meetings, get access to training, advice and support to launch their careers, or start their own ventures. The Hub also offers a range of online and virtual training courses to ensure support is available to young people across the UK.

Alongside the thousands of opportunities for work experience with O2 and our partners, GoThinkBig has continued to provide careers advice and support for young people, running regional career inspiration events around the country with expert speakers from a range of industries alongside more practical support, including a CV review and a feedback service and advice on how to approach job interviews.

GoThinkBig supports the commitments we made as signatories to the Government's Social Mobility Business Compact, and we were recognised as one of 12 Social Mobility Business Champions, committed to helping young people to get into the world of work, irrespective of their backgrounds.

All these efforts are designed to help secure bright futures for the next generation by providing inspiration, advice and tangible opportunities to develop their skills so they can compete with confidence in the emerging digital economy.

In order to report the number of young people who have benefited from our Think Big projects, we have included both project leaders (young people who receive grants from Think Big) and also the teams of young volunteers who work with them to plan and deliver the projects in communities across the UK. Although we recognise that these projects have a broader ripple effect, positively benefitting many more people in the community, we have not included this wider social impact of these activities.

With GoThinkBig, young people have access not only to the rich content of the website and a range of tools and practical support online, they also benefit from work experience and job opportunities offered by O2 and our partner Bauer Media, as well as our 40 plus corporate partners. We calculate the number of unique visitors who have benefitted from the site as well as the number of opportunities available to them, and are continuing to more robustly test how many young people have been helped to gain skills for life through the site. This will enable us to provide a more detailed methodology for assessing the impact of our face to face and digital support programmes in our 2015 report.

THINK BIG FOR CUSTOMERS

By the end of 2015, our products and services will be helping 10 million people live in easier and more sustainable ways.

On track

A range of initiatives from O2 influence this goal and, generally, progress across all of them remains positive.

When it comes to O2 products and services that help O2 customers live easier, more sustainable lives, some have a greater impact than others. Those services that – with O2's involvement – offer the biggest potential to help consumers and businesses lower their environmental impact are led by our smart metering capabilities, which are increasingly making their way into the property and logistics sectors. In 2013, we saw approximately 2.7 million customers benefit from this technology and now estimate the figure will be close to 3.8 million by 2015.

Another strong area is our Eco rating tool, which is driving both sustainability gains in the supply chain and raising awareness with customers. Post-purchase research conducted shortly after its launch in 2011 showed that 15% of our customers were aware of Eco rating and 4% had actively considered sustainability scores when buying a phone. We will continue to communicate Eco ratings to customers.

Alongside Eco rating, O2 Recycle helps both consumers and businesses lower their negative impact. Through these two initiatives combined, we saw just over 1 million customers take up the benefits in 2013-14. That figure is projected to rise to 1.2 million by 2015.

Several other projects affect our customers' ability to live in more sustainable ways. They include our SIM-based fleet-management capabilities and flexi-working technology, both of which offer users significant fuel and carbon savings.

Our 'Charger Out of the Box' initiative delivered over 150,000 charger-free handsets to customers in the period of this report. Further, within our Priority Moments suite, we are seeing up to 7% contribute a positive sustainability impact, such as promoting health and wellbeing and use of public transport. We plan to increase such offers in coming years.

Overall, the number of customers whose sustainability impact could be positively affected by Telefónica UK's products and services is currently projected to reach our target of 10 million in 2015.

THINK BIG FOR PLANET

Deliver carbon benefits to our customers that are 10 times the impact of our network by the end of 2015

Off track

As we have said we firmly believe that digital technology is fundamental in enriching people's lives within the natural limits of our planet. We're making progress on this target as well, however not at the rate or within the timeframe we initially envisaged. The closure of O2 Health had a very significant impact. When we originally set out on our Blueprint journey in 2012, our projections for health services and other digital products played a vital role both in terms of customer numbers and travel-related carbon savings for both consumers and healthcare authorities.

Digital services such as fleet management and general logistics services, machine-to-machine connectivity and other carbon-savings initiatives like removing chargers from our phone products, O2 Recycle, and flexi-working business services all have a role to play in delivering a lower carbon society. And, of course, the win of the UK Government smart meter contract will have a significant impact. By the time the roll-out of meters across Great Britain properties is complete in 2021, it's likely to generate annual carbon savings of almost 950,000 tonnes of CO2e and be delivering carbon savings several times our network's carbon impact.1

Nonetheless, although 2014 business projections suggest we can expect to achieve savings greater than those of our network carbon impact, we are still some distance from our stretching aspiration to deliver carbon savings of 10 times the impact of our network.

1 Based on projections assuming the carbon efficiency of the Telefónica UK network is similar to that predicted for 2015.

Performance

When we published our three big goals in 2012, they were deliberately set with a sizeable gap between our projected performance and our business sales targets. On this particular goal, our initial 2012 projections suggested we could achieve up to a six times carbon offset ratio.

However, we are now projecting a shortfall on this target within the three year timeframe of the Blueprint. This is primarily due to the slower-than-expected consumer move towards 'digital living' enabled by such services as e-health, e-finance and smart metering. This has meant that – rather than increasing our business sales targets to meet the gap – Telefónica UK has had to revise business projections to account for the unforeseen early dip in consumer uptake. As of June 2014, our projections suggest we could achieve between two and three times our network carbon impact. However, we continue to evolve our methodology on carbon assessment with leading experts, and recognise that this figure is likely to change.

Public policy

We believe our experience highlights the vital role of public policy to drive change in consumer behavior.

Ultimately, as consumers become more familiar and confident with digital products and their possibilities, we will deliver this goal. In the meantime, we need to encourage the move to different, lower-carbon lifestyles.

The UK's commitment to the roll-out of smart metering across Britain demonstrates the positive impact that government policy can have on the UK's environmental agenda. In these early days, as digital services take time to become established, local and global policymakers will be key players in encouraging major change.