Citizenship and Sustainability

Overview

We strive to minimize our environmental impact in ways that are relevant to our business and important to the communities we serve. We're committed to taking meaningful steps to become more energy efficient and to engage our employees in helping us reduce our environmental impact.

Measuring Our Carbon Footprint

In our most recent Citizenship and Sustainability (C&S) Report, we committed to releasing our domestic carbon footprint by this year’s end. It is no small task, but the knowledge we have obtained – and will continue to obtain – reassures us that our current initiatives are focused in the right areas. This benefits our company, our customers and the communities where we do business.

Challenges

Combining four distinctly different operating companies in the mergers of SBC, AT&T, BellSouth and Cingular brought with it the challenge of integrating many different data systems. Just as one example, we look at more than 220,000 utility accounts to help determine AT&T’s energy use. As we began measuring our carbon footprint, we focused on maintaining a high level of data integrity and automating our processes for efficiency and reliability. We attempted to be as thorough as possible when analyzing potential emission sources. For instance, even though sources like propane and portable engines are small and extremely geographically distributed, we put forth an effort to gather as much data as possible and make the best estimates possible. Additionally, we tracked and calculated CO2, CH4 and N2O by each emission source, rather than utilizing an average incremental assumption factor for the non-CO2 gases. Our analysis revealed that 99.53 percent of our emissions are from CO2, with just 0.47 percent coming from CH4 and N2O.

Although this is our first company-wide disclosure, AT&T California has been reporting and verifying operational emissions in California through the California Climate Action Registry since 2004. We have incorporated the lessons learned from those experiences into the effort for our comprehensive domestic operations.

We believe that our approach most accurately reflects AT&T’s operations and emissions. Because the industry has not adopted uniform and mandatory processes for gathering and reporting emissions data, however, it is important to note that comparing our results with other entities’ results may not provide an accurate comparison. As industry standards are refined, we will continue to review and refine our process.

All of this meant we took a bit longer to report a measure, but we feel it is a very comprehensive number that is as accurate and detailed as we can make it at this time. This effort has also helped identify areas where we can make further data quality refinements to drive operational reduction efforts.

Findings

Direct Emissions (Scope 1)

For 2008, we emitted 1,105,630 metric tons of direct (scope 1) emissions. Seventy percent of these direct emissions come from our ground fleet, and we are taking significant steps to increase our fleet’s efficiency and decrease its impact on the environment. For example, we are investing $565 million in alternative fuel vehicles over the next 10 years. We expect this will reduce emissions by 211,000 metric tons of CO2 over the 10 year period. We are also looking into electric vehicles and finding ways to run our current vehicles more efficiently through simple practices such as avoiding fast accelerations and hard braking, reducing the weight of loads, implementing an idling policy and keeping tires properly inflated. Using the same communications technology that we provide to other commercial fleets, we have seen an increase in our productivity and fleet efficiency. For example, we are using GPS with our nationwide mobile broadband network to help fleet technicians actively manage their vehicles, increase efficiency and reduce fuel and insurance costs. Check out the Minimizing Our Environmental Impact section of our Citizenship & Sustainability Report for more about this.

Another large component of our direct emissions – 13 percent – comes from the engines that power our generators, which provide back-up power for AT&T. These generators are an important component of AT&T’s Network Disaster Recovery (NDR) organization. When disaster strikes, NDR works to keep wireless and wired communications flowing. Additionally, they provide support for field operations where power is not available. This keeps us – and our customers – running effectively and efficiently.

Indirect Emissions (Scope 2)

Our indirect (scope 2) emissions represent 87 percent of our overall emissions for 2008, at 7,904,886 metric tons. These emissions come from the electricity we purchase to power our network and operations. But the interesting dilemma of the Information Communications and Technology (ICT) industry is that our growth actually enables carbon reductions for others. The Global e-Sustainability Initiative commissioned a recent study showing that ICT solutions could cut annual carbon emissions in the U.S. by up to 22 percent by the year 2020. For more on this, view AT&T’s filing at the EPA on the topic here.

It is not enough to enable others to operate more efficiently, though. That is why we are working to be more efficient ourselves. One major goal is to reduce our energy use relative to what drives our energy use – in other words, the amount of data we carry on our network. For 2008, we used 654 kilowatt hours of energy per terabyte of data carried on our network. (To put that into context, a terabyte is roughly the electronic equivalent of the content of books made from 50,000 trees.) For 2009, we have set a goal to reduce that intensity by 15 percent. Separately, we joined the U.S. Department of Energy’s Save Energy Now LEADER initiative, which asks that companies pledge to reduce their energy intensity by 25 percent or more during the next 10 years.

Managing overall energy use in a company our size is a big task. Recently, we realigned our organization to create a company-wide energy management group. To head the group, we have brought in an industry leading expert on energy and sustainability. For more information about our specific energy reduction initiatives, check out our 2008 Citizenship and Sustainability Report.

Other Emissions (Scope 3)

Other (scope 3) emissions account for 56,110 metric tons for 2008. At this point, we chose to focus on business travel in our scope 3 calculations. We will continue to assess whether there are additional areas we should cover in this journey, such as supply chain or product emissions. The World Resources Institute is developing supplemental Scope 3 Accounting and Reporting Standards. We are participating in the development of these standards and expect to use them to assist us going forward.

To address the business travel emissions, we are deploying solutions like AT&T Telepresence Solution – which combines high-definition video with crystal-clear audio to create an "in-person" experience. We believe Telepresence can help companies like ours drastically reduce business travel emissions. By year-end 2009, we expect to have 50 AT&T-owned Telepresence locations across our company and anticipate that this technology will reduce travel and cut an estimated 31,000 metric tons of GHG emissions over the next six years. This is the equivalent of taking nearly 6,000 cars off the road.

AT&T’s emissions profile:

AT&T’s 2008 Domestic GHG Emissions Inventory, By Scope

• Scope 1 = Direct Emissions (Fleet, Natural Gas, Engines, etc.)
• Scope 2 = Indirect Emissions (Purchased Electricity)
• Scope 3 = Other Indirect Emissions (Business Travel)

What’s Next

Our 2008 carbon footprint provides a baseline measurement for our domestic operations – a starting point to continue monitoring and reducing our operational impacts. As we move forward with our 2009 assessment, we recognize the following factors may increase our overall emissions:

• For our 2009 footprint, we will broaden our assessment to include AT&T’s international operations.
• As customer demand for our products and services increases, coupled with increased applications of our technology, the amount of energy needed to power our network will increase. At the same time, the expanded use of communications networks will also enable our customers to live more sustainably, by moving work to people rather than people to work, connecting rather than traveling, managing business remotely and in real-time and improving transportation and distribution systems. According to the Smart 2020 report, the ICT sector stands to enable carbon reductions six times larger than its own footprint, potentially reducing overall U.S. emissions by up to 22 percent in 2020.

You can find AT&T’s full 2008 GHG emissions information here. As we move ahead, we will continue to publish our progress and look for additional ways to operate more efficiently.

Managing Energy, Improving Efficiency

Energy Efficiency Initiatives
We connect more than 300 million people a day, and every day those connections increasingly carry with them more voice, data and video content. That increased amount of data and content means more capacity, and thus more power, is required to run the network.

We're taking meaningful steps to run an efficient network and explore alternative energy, and we have established a metric for our energy use that measures our electricity usage intensity to the area that is linked both to our growth and to our energy usage — the total amount of information transmitted over our network, including our global backbone IP network, voice and video traffic.

For 2008, we utilized 654 kilowatt hours per terabyte of data carried on our network. For 2009, we have set a goal to reduce that intensity by 15 percent.

In 2008 we undertook many initiatives targeted at improving our energy use in the following areas:

• Network Initiatives
• Data Center Initiatives
• Facility Initiatives

For more details on our efforts in these areas, view our current report.

Exploring Alternative-Fuel Technologies
AT&T operates one of the largest commercial fleets in the United States with about 85,000 vehicles. We recognize the economic and environmental implications of maintaining a fleet that size — which is why reducing fuel consumption and emissions is an ongoing priority and challenge for us. Finding cleaner, more efficient methods of powering our fleet is one of the most important steps we can take.

After careful research of available technologies, we selected three types of AFVs to try in 2008:

• compressed natural gas (CNG) vans
• electric hybrid conversion work trucks
• electric hybrid OEM vehicles

Over the course of 2008, we rolled out 105 AFVs in more than 30 cities across 17 states. That deployment of vehicles helped us conserve nearly 34,395 gallons of fuel in 2008, reducing our CO₂ emissions by more than 300 metric tons, according to the U.S. EPA Greenhouse Gas Equivalencies Calculator.

Building on the knowledge we gained in 2008, we've created a long-term goal — announced earlier this year — to expand our alternative-fuel fleet to more than 15,000 vehicles. With this action, we hope to help signal demand for more fuel-efficient vehicles to be produced in this country.

Rather than waiting for the production of vehicles to become standard, we're teaming up with domestic suppliers to meet the needs of our business now. We also hope that our investment in CNG technology will help update our country's transportation infrastructure and create new jobs.

Alternative Energy

In 2008, we announced two important alterative energy efforts.

Through Austin Energy's GreenChoice renewable energy program, we began purchasing wind power for 10 percent of our electricity consumption in all AT&T facilities in Austin, Texas. This effort promises to help us avoid 7.2 million kilowatt hours of fossil-generated electricity each year.

We also installed a 1-megawatt solar power system on our facility in San Ramon, Calif. The 3,700 solar panels will generate more than 1.6 million kilowatt hours of electricity a year and reduce the building's normal power consumption by more than 4,300 kilowatt hours per day.

Our goal is to learn from these pilot efforts and determine the suitability of wind and solar projects for additional locations in the future. Our energy teams are currently evaluating potential opportunities for renewable energy deployments in 2009.

Reducing Waste

From e-waste to copper telecommunications wire to office supplies, we're working diligently to expand our waste management and reduction efforts so we can make a real impact.

E-waste
As electronics become ever more important in our daily lives, the amount of electronic waste (e-waste) also grows — as does the importance of disposing of it in a responsible manner. We take our commitment to ensuring such waste is properly cared for seriously, as it can contain toxic metals and other hazardous materials.

In 2008, we developed an enterprise-wide reporting system to capture the electronics we are donating, recycling or reusing. Last year, this comprised almost 68,000 computers, monitors, servers and other equipment.

Solid Waste and Recycling
We recognize the importance of recycling in our buildings, which is why we currently maintain paper or cardboard recycling at more than 300 locations, and we recycled more than 10 million pounds of material in 2008.

Beyond traditional recycling such as paper and cans, we maintain a robust program to reclaim network resources such as copper telecommunications wire and central office exchange equipment. In 2008, we kept more than 75 million pounds of such "scrap" from landfills.

Engaging Employees

At AT&T, our sustainability commitment reaches across the company. We recognize that the dedication, passion and support of our nearly 300,000 employees are what make our sustainability efforts possible.

Champions of the Environment
Across the country, our employees are doing their part to contribute to a cleaner environment, and their efforts don't go unnoticed.

Now in its 15th year, the annual AT&T Champions of the Environment program honors individuals and teams who've made noteworthy environmental contributions in their communities and at AT&T in the last five years.

Each year, we select five community winners for their efforts to become more environmentally sustainable and five winners for environmental projects undertaken in the workplace.

In 2008, winning projects included an employee who makes her own biodiesel fuel and another who installed a windmill generator in his backyard. Team winners included a low-flow toilet installation project in San Antonio that is expected to save the company nearly 13 million gallons of water and $52,000 each year. Another award went to a team that developed ways to reduce annual paper use by 15 tons.

All winning projects receive a $1,000 donation to the environmental nonprofit of the winner's choice.

AT&T EcoSystem Site
In 2008, we worked to develop a comprehensive employee engagement program to make our sustainability communication relevant, frequent and easily accessible. Our goal is to communicate with our employees on a regular basis and involve them on a personal and professional level.

A key milestone toward this commitment was the launch in late 2008 of an employee Web site, AT&T EcoSystem, specifically focused on our environmental sustainability efforts. The site provides our employees with a resource to help them stay connected to our latest initiatives and allows them to join the conversation by sharing questions and suggestions with our team of sustainability experts. Employees can also check out hints for sustainable living or learn about colleagues who are already making a real difference, at work and in their communities.

AT&T Pioneers
We also involve our employees in our environmental efforts through our volunteer organization, the AT&T Pioneers. While our Pioneers devote hours of their time and talents to a variety of causes, many of our chapters undertake specific projects to help the environment. Some initiatives in 2008 included:

• AT&T Pioneers in Mississippi celebrated Arbor Day by planting magnolias — the state tree — in communities across the state. These Pioneers took the opportunity to educate communities about the origins of Arbor Day, the value of such plantings and what it means to give back.
• In Florida, Pioneers worked with a local school, staff and parents to build an outdoor learning center — a lush botanical garden with a fish pond and waterfall.
• Pioneers in Alabama created a "3 R's Challenge" and essay contest to tap into the imaginations of sixth-grade students and get them thinking about preserving and protecting our planet.

Across the country, Pioneers also participate in park, river, street and beach cleanup and beautification projects. And our volunteers are integral in our support of the charity Cell Phones for Soldiers by leading community cell phone recycling drives. In 2008, AT&T Pioneers brought in more than 25,000 devices through such drives.