Environment

• GHG Emissions
• OSHA Incidents
• Stewardship/Recycling
• Energy Use

• Energy Management
• Alternative Energy
• Environmental Health & Safety
• Environmental Compliance

Greenhouse Gas Emissions (GHG)

We're committed to measuring and understanding our GHG emissions and taking steps to manage them. We've been measuring and disclosing our GHG emissions since 2008. These are our results for 2011.

For our 2011 greenhouse gas inventory, we obtained independent assurance of our Scope 1, 2 and 3 (business travel) emissions from Ernst & Young. Their statement can be found in this Independent Accountant's Report.

Our GHG emissions increased slightly in 2011 compared to 2010, with a slight increase in our Scope 2 emissions and a slight reduction in Scope 1 emissions.

Direct emissions account for 11 percent of our total GHG emissions. These emissions were down slightly in 2011 compared to 2010. Almost 67 percent of our direct emissions come from our fleet. Our commitment to operate a more efficient fleet specifically led to an almost 3 percent reduction of fleet GHG emissions compared to 2010. Much of this progress has been a result of fuel efficiency gained from our adoption of 5,114 alternative-fuel vehicles by year-end 2011 and operational efficiency. This is part of AT&T's commitment to deploy approximately 15,000 alternative-fuel vehicles through 2018. Read more about our Transportation Initiatives.

Another large component of our direct emissions — more than 11 percent — came from the stationary engines and portable generators that provide back-up power for AT&T. These generators are an important component of AT&T's Network Disaster Recovery (NDR) organization, which works to keep wireless and wired communications flowing when disaster strikes. Generators also provide support for field operations where power is not available.

We have a goal to reduce our Scope 1 emissions 20 percent by 2020, using a 2008 Scope 1 baseline of 1,172,476 mtons CO_2-e.*

Scope 2 (Indirect Emissions)
Our Scope 2 emissions account for more than 88 percent of our total GHG emissions. These come from purchased electricity and steam. Due to increased demand on the network, we saw more than a 3 percent increase in these emissions over 2010.

Normalizing our electricity use to the data carried on our network, we did see a 16.5 percent decrease from 2010 in kilowatt hours per terabyte of data carried on our network.

Also, we set a goal in 2011 to reduce the electricity consumption of our company relative to data growth on our network by 60 percent as compared with year 2014 (baseline of 2008). Read about our Energy Management efforts.

Scope 3 (Other emissions)
We continue to measure our business-related travel in our Scope 3 emissions. To address these GHG emissions, AT&T more than doubled its internal deployment of Telepresence, going from 50 rooms in 2010 to more than 130 rooms by the end of 2011. The company has realized savings of more than $13.9 million in travel dollars and more than 8,261 metric tons of CO2 equivalent emissions avoided in 2011.

We are aware of the publication of the Greenhouse Gas Protocol's Corporate Value Chain (Scope 3) standard and are exploring how to apply it to our business. To that end, we are working with the Carbon Disclosure Project (CDP) Supply Chain Initiative to measure the emissions from our top suppliers. Each year we send the survey to suppliers who represent approximately 80 percent of our total spend. We know that as of year-end 2011, 60 percent of our spending was with suppliers who track GHG emissions or had plans to do so by 2012. We've set a goal that by the end of 2015, the majority of our spending with strategic suppliers will be with those who track GHG emissions and have specific GHG goals. Read more about our efforts to Engage our Supply Chain.

For additional detail about AT&T's GHG emissions, please see our Methodology and Process Detail Document.

*In 2011, we set an absolute Scope 1 GHG emissions reduction goal to reduce Scope 1 emissions 14 percent by 2014 using a 2008 baseline. When we sat down to identify our progress toward this goal at the end of 2011, we realized that improvements made in the calculation methodology and underlying source data for three of our emission sources — refrigerants, engines and portable generators — partially inflated reductions over our baseline year. In an effort to both accurately report our current year GHG emissions inventory and to measure Scope 1 goal progress made through our emissions reductions activities, we have decided to provide both a current year GHG emissions inventory and a separate baseline for performance against our goal (consistent with GHG Protocol best practices). In order to calculate our 2008 performance baseline, we will use the 2011 values (see Performance Section below) for refrigerants, engines, and portable generators as constants for the duration of the goal period (2008-2020). This will allow us to better track changes in emissions due to our activities versus those attributable to reporting improvements. Ultimately, our yearly inventory will reflect our best available data and reporting practices. As always, we seek to further reduce emissions and improve the quality of the reporting associated with them.

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OSHA Incidents

Our goal is to provide a safe and healthy workplace for all employees — it's an essential aspect of our Environment, Health and Safety (EH&S) policy. We work diligently to protect our employees through the prevention of occupational injuries, illnesses and workplace incidents.

We provide job-specific EH&S training to all employees based on established guidelines and record successfully completed courses in each employee's training record.

In the event an accident does occur, it is our policy to respond swiftly and effectively to protect our employees, company assets, neighboring communities and the environment. We require employees to report all alleged work-related injuries, illnesses and accidents. We investigate such incidents and look for opportunities to implement process improvements. For U.S. operations in 2011, AT&T's OSHA total recordable occupational injury and illness rate was 2.14 per 100 employees. This rate is lower than the most recent average published by the Bureau of Labor Statistics for the telecommunications industry, which is 2.20 (for 2010).

Learn more about how we provide good jobs to our employees.

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Stewardship/Recycling

Cell Phone Recycling

In 2011, AT&T collected approximately 3 million cell phones for reuse and recycling and 1.7 million pounds of batteries and accessories.

There are several ways customers can recycle their old phones. Customers can:

• Deposit their phones at drop-off bins in all of our retail locations.
• Pick up free, prepaid mailing envelopes in stores and online — postage-paid mailing labels are available at att.com/recycle.
• In 2012, we are launching a trade-in program for our customers.

We're also taking steps on the front end of the cell phone life cycle to help ensure the products we're selling and their packaging have more environmentally sustainable characteristics than their previous versions. In 2010, we announced environmental goals associated with the manufacturing of new wireless devices sold by AT&T, required to be met by the end of 2011.

In cooperation with original equipment manufacturer (OEM) device suppliers, the following goals were met for new handset models in the AT&T mobility portfolio:

• Reduce packaging, use non-petroleum-based inks and use recycled materials in documentation
• Have a majority comply with the GSMA Universal Charging Solution.
• Attain 75 percent of models that meet a recyclability rate of at least 65 percent.
• Comply with the EU Restriction of Hazardous Substances (RoHS) standard for reduction of hazardous substances.
• Create uniform/standardized handset boxes that reduce our current box size by 20 percent across the majority of our handset portfolio.
• Develop/design a free "eco awareness" device application to create customer awareness of sustainability.

In 2011, AT&T customers saw a transition of AT&T-branded accessory packaging to a new plastic that is composed of up to 30 percent plant-based materials. The plastic is sourced from ethanol harvested from natural sugarcane and will be used in most device cases and power accessories. The sugarcane used in this plant plastic is a rapidly-renewable agricultural crop and replaces nearly a third of the fossil fuels traditionally used.

Read more about cell phone recycling at AT&T.

YP Real Yellow Pages

Responsible sourcing
Our telephone directory paper is made mainly from residual sawdust and scraps from lumber production processes and, depending on market availability, post consumer recycled paper. We require our suppliers to practice renewable, sustainable resource management in the sourcing of wood fiber used in making our paper.

Recycling
YP Real Yellow Pages from AT&T are recyclable. Recycled phone books can be made into useful products, such as home insulation, bathroom tissue, cereal boxes, roofing shingles, animal bedding, and, of course, new phone books. To find out where to recycle outdated phone books, customers in many communities can call the AT&T Project ReDirectory toll free telephone number, 1-800-953-4400, which is listed on the directory cover.

Managing directories
Some consumers may wish to customize the number of directories they receive on an annual basis or order additional directories. These consumers may call 1-866-329-7118 or visit www.att.com/mydirectories. Other consumers may visit www.YellowPagesOptOut.com to stop delivery of directories published by AT&T or other publishers.

We monitor the quantity of directories we print in order to avoid excess production.

Electronic directories
We provide electronic alternatives, such as YP.com, RealPagesLive.com and The Real Yellow Pages app that is compatible with the Apple iPad, further reducing the total number of printed directories. AT&T Interactive is developing new online and mobile search applications intended to make consumers' lives easier, while helping businesses grow.

Read more about our Telephone Directories programs for YP Real Yellow Pages and the White Pages.

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Energy Use

In 2008, we established an intensity metric to measure our electricity usage as compared to our network traffic growth. We did this to show progress in our efficiency efforts at a time when heavier network demands are driving higher electricity use. Here is our progress to date:

		2008	2009	2010	2011
Intensity	kWh/Terabyte	654	498	415	347
Metric	YOY Change		-24%	-17%	-16.5%

We reduced the electricity consumption of our company relative to data growth on our network by 16.5 percent in 2011 as compared to 2010. This approximately met the goal we set in 2010 to see a 17 percent year-over-year reduction.

Our goal is to achieve an intensity metric of 262 kWh for each Terabyte of traffic that flows over our network by 2014, which represents a 60% decrease compared to our 2008 baseline. If we meet this aggressive goal, we will be carrying almost three times as much data for each kWh of electricity we use in 2014 compared to 2008. This goal becomes increasingly ambitious when you consider that wireless data traffic on AT&T's network has grown more than 20,000 percent between 2007 and 2011.

Read about our Energy Management efforts.

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Energy Management

As the foundation of our energy management tracking program, we centrally process all of our utility invoices, and extract the energy consumption data from the invoices to manage the program. This energy information is available to all of the internal network operators and real estate managers — who we call the Energy Champions. This accessibility and transparency drives accountability. The Energy Team is also able to benchmark performance, set expectations and see trends over time.

In addition to collecting data from invoices, we perform audits at our largest 1,000 facilities at least every 18 months.

Using the data from the database, we have entered more than 1,350 unique properties — including our top 1,000 facilities — in the ENERGY STAR^® Portfolio Manager.

Energy Scorecard
To promote accountability and drive results, we use an Energy Scorecard to benchmark the energy performance at each of our 1,000 largest energy-consuming facilities. The Scorecard reports energy management at each of these facilities, and we use this information to set benchmarks and goals for each facility. In addition, Scorecards report on projects and initiatives undertaken by the Energy Champions. The Scorecards are published monthly to all Energy Champions for them to see clearly how their energy use is trending.

Quarterly, the Energy Team — headed by the Energy Director — reviews performances and gives each real estate manager a score for her or his efforts; determined by not only by savings results, but also by the types of initiatives attempted and training undertaken. In 2011, scores improved by 4.5 percent compared to 2010. The results have been incorporated into the annual performance objectives for real estate managers.

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Alternative Energy

Alternative fuel vehicles

In 2009, we made a commitment to invest up to $565 million to deploy approximately 15,000 alternative-fuel vehicles (AFVs) over a 10-year period through 2018.

By the end of 2011, we had deployed 5,114 AFVs, including 3,469 CNG vehicles and 1,617 hybrid electric vehicles. We have also deployed three all-electric vehicles (AEVs) — a Smith Newton cargo truck in St. Louis, Missouri, and a total of two Ford Transit Connect Electric vans in Dallas, Texas, and Los Angeles, California — and 25 extended range electric vehicles (EREVs) — Chevy Volts deployed to nine states nationwide.

Read more about our Transportation Initiatives.

Solar

By the end of 2011, we had contracted five solar systems and have plans to expand installations in 2012:

• The 240 kW Trenton, N.J. system, installed in 2011, will produce 288, 500 kWh of electricity per year.
• The 545 kW Mojave, Calif. system, also installed in 2011, will produce more than 1 million kWh per year.
• The solar system on AT&T's San Ramon campus generates 1.6 million kWh annually.
• The solar system on AT&T's Secaucus, N.J. site generates 1 million kWh per year.
• One of our data centers in San Diego, Calif., runs off of a 262 kW system that produced 477,000 kWh in 2011.

In total, annual solar power production from these installations is more than 3.1 million kWh. We contracted for eight additional systems to be installed at five sites in New Jersey in 2012 and 2013.

Fuel cells

Fuel cell technology produces clean and reliable onsite power. We're working with Bloom Energy to install 7.5 MW of Bloom Energy fuel cells at 11 of our facilities in California. When completed, this will avoid emitting approximately 250 million pounds of carbon dioxide, equivalent to removing more than 3,700 cars from the road.

Two systems came online in San Jose in December. All 11 systems will be operational by the end of April 2012. When all are operational they will produce 62 million kWh per year, enough to power more than 5,331 homes annually.

Wind

We also continue our involvement with Austin Energy's GreenChoice alternative energy program through which we purchase wind power for 10 percent of our electricity consumption in all AT&T facilities in Austin, Texas. This effort will help us avoid 7.2 million kWh of fossil fuel-generated electricity each year.

Read more about our use of Alternative Energy.

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Environmental Health & Safety

AT&T has a strong Environmental Management System (EMS) — and it starts with an Environment, Health & Safety (EH&S) policy signed by AT&T Chairman and CEO Randall Stephenson. Our Executive Environmental Council, which is comprised of senior leaders from across AT&T's business units, is charged with implementing this policy. The Council helps ensure AT&T's environmental compliance and works to identify additional areas for improvement.

In addition to our senior leadership, AT&T has an Environment, Health and Safety (EH&S) compliance staff and organizational structure organized around the Plan, Do, Check, Act model and follows a management system that is based on the principles of OSHA 18001 and ISO 14001. This organizational structure includes:

Technical Support: Develops EH&S programs and compliance training to comply with legal requirements.

Field Support: Assesses business unit EH&S compliance. EH&S assessments are performed for a selected sample of AT&T facilities by facility type. A standard facility-based protocol exists that allows the assessor to pull questions applicable to the facility type being assessed. All findings are documented in an online assessment system where corrective actions are tracked. In 2009, AT&T assessed over 2,300 facilities with over 300 being conducted at randomly selected facilities by facility type. In addition, AT&T performed, over 600 focused reviews (only one section of the protocol), over 1,800 work observations (employees performing their work) and over 200 EH&S Plan Reviews. (Each business unit (BU) has an individualized EH&S Plan with specific targets. EH&S monitors work groups' compliances with their BU's plan.) AT&T also performed programmatic audits on key topics.

Compliance Data Management: Implements compliance activities, such as centralized permitting/registration of tanks and air emission sources, DOT compliance and OSHA recordkeeping.

EH&S Information Systems: Develops the Compliance Data Management System (CDMS) to manage environmental activities, including, but not limited to, tank, air, incident management and hazardous waste and safety activities, including, but not limited to, lockout/tagout, ergonomics, and injury/incident reporting.

Strategic Compliance Partners: Works with business units (via EH&S Business Unit Coordinators) on systemic opportunities for EH&S improvement.
Throughout each of these groups, AT&T has specialized professionals who serve as incident managers. These individuals manage regulatory inspections as well as any unexpected EH&S-related emergencies by working with the site personnel and others in the business units. View AT&T Environment, Health and Safety (EH&S) Management System Table (PDF).

AT&T has established EH&S training paths by functional responsibilities. The training requirements are listed on the company's EH&S Web site and completions are tracked through the company's training system.

The company has over 100 EH&S-related procedures that are updated at least every 3 years or sooner if needed. The procedures follow a standard template that identifies the scope of the procedure, who is responsible for what, when the procedure/task is to be implemented and how the procedure/tasks are to be carried out. In addition, each procedure identifies related legal and regulatory requirement, other associated AT&T EH&S documents and related training.

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Environmental Compliance

We follow the most stringent environmental compliance laws applicable to our operations. When conducting operations abroad, we abide by U.S. environmental compliance laws if they are more rigorous than the laws in the country where we are conducting business. Our operating companies had no significant environmental compliance-related enforcement actions (defined as those that have resulted in sanctions equal to or exceeding $100,000) in 2011.

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