Building a sustainable business Managing our social, ethical and environmental impact 21 November 2007 1
Catherine May Group Director of Corporate Affairs Centrica 2
Introductions Catherine May, Group Director of Corporate Affairs, Centrica Kieran McKinney, Director of Investor Relations, Centrica Simon Henderson, Director of Corporate Reputation, Centrica Ian Peters, Chief Operating Officer,…
Kieran McKinney Director of Investor Relations Centrica 4
Our strategic priorities 1 Transform British Gas 2 Sharpen up the organisation and reduce costs 3 Reduce risk through increased integration 4 Build on our growth platforms 5
Strategic priorities: progress Transform British Gas 1 Sharpen up the organisation 2 Led customer prices down with two price reductions Restructured BGR into manageable P&Ls Improving customer service Implemented 3 year planning…
Focus for todays discussion Governance and approach: Simon Building sustainable customer service: Ian British Gas New Energy: Gearid Investment in low carbon generation: Sarwjit Questions 7
Simon Henderson Director of Corporate Reputation Centrica 8
Governance: CR Committee Board Committee Revised terms of reference Focused membership Risks and opportunities Members Duties Mary Francis, chairman Senior Independent NED Review processes and controls for identifying and managing CR…
Management: defining our approach Maximise shareholder value in line with business principles Proactively engage with stakeholder groups Identify and prioritise key impact areas Control risks and maximise opportunities Deliver…
CR impact areas: what matters Energy Managing the reliable supply of energy now and in the future, Sustainability and keeping prices affordable Playing a leading role in the move towards a low carbon economy by Climate investing in…
Business Principles: in action Guide to Sound Business Practice On-line learning programme 12
Ian Peters Chief Operating Officer British Gas 13
Investing in customer service Weve made significant investments to restore service in British Gas Residential 800 contact centre agents Extensive training programmes for all customer service staff Widening accountabilities to…
Positive impacts have been delivered Average speed to answer telephones has fallen from 260 seconds at its worst in April to consistently below 30 seconds in recent weeks Abandoned calls have reduced from 18% in April to 3% Internal…
energywatchs external reporting has changed energywatch now include all contacts in their external reporting, including general enquiries Our internal statistics reflect the continued improvement in the level of complaints…
energywatch complaints declining A lag indicator of Still much more service performance improvement required September shows actual Numbers from energywatch energywatch contact vs. Industry (excl BGR) for BGR but Forecast for…
New British Gas website launched 26% increase in on-line billing 620k on-line self servers Increase in core product sales of 58% Reduced CPA compared to offline channels Visits increased by 95% Enhanced self service…
British Gas Customer KPIs: October 2007 Improvement This Year Average Products per Customer 3.5% Customer Defection Rate 32% Net Promoter Score (NPS) 55% Brand Preference ALL CONSUMERS who would choose British Gas 8% Price…
Energy account volumes have grown since Q1 price reductions and service recovery. This is the first consistent growth trend since 2003 Total customer account numbers (m) 16.0 15.9 15.8 15.7 Jan-07 Feb-07 Mar-07 Apr-07…
British Gas Business: Customer satisfaction has been rising steadily 7.4 BGB CSAT Survey Results 7.2 Corporate Customers Datamonitor Major Energy Users Survey 7 Q3 2007 6.8 6.6 Q3 07 Rank Move (vs. Q2) 6.4 Gas 1st Place (2nd)…
British Gas Services: Significant and sustained progress in customer service Winter Performance 2005 2006 2007* 2005 - 2007 Calls answered 8.5m 9.7m 10.6m Calls abandoned 25% 10% 3.4% Average speed to answer 23secs 30secs…
Supporting Vulnerable Customers Beyond The Obligations 23 23
As the industry leader, we are proactively tackling fuel poverty with a number of discretionary initiatives, which in turn strengthen our reputation, reduce risk & enable commercial decision making Reaching our most Customer insight,…
Our social initiatives improve the accessibility of affordable energy and provide support for our most vulnerable customers Essentials Launched in February 2007 3 year 32m annual commitment for up to 750,000 customers Tariff Lowest…
British Gas has a long-standing commitment to social initiatives British Gas customers on average save the most on its social tariff Recent Ofgem research supplemented by FPAG report recognises BGR as the leader in this field The…
Gearid Lane Managing Director British Gas New Energy 27
Centricas Position on Climate Change Climate change Significant stakeholder debate and action in Europe and also in North America. Climate change is happening. Policies and action plans to slow and stabilise greenhouse gas emissions…
Climate change: challenge and response Market Drivers Strategic Response Consumers will choose Promote brand credentials brands that fit with their and maintain upstream ethics advantage Reducing energy sales top line Consumers…
British Gas New Energy Position British Gas as the leading energy player in the UK on green issues, building on existing leadership position: Lowest carbon intensity of any UK energy supplier Largest supplier of energy efficiency…
Early wins Launch of Future Energy and Zero Carbon Green Streets Energy Savers Report Were In This Together Ceres Power Partnership trials Sky and Currys Increasing recognition of green credentials Carbon Disclosure Leadership…
Above The Line Advertising Overview Green with lead as money saving Green with focus on environmental attributes Waste Watchers Expert Falling & Green MIGWYA Lowest CO2 Jan 2005 Oct 2006 May 2007 London - June 2007 Sept 2007…
Posters and online directing people to makeitgreenernow.co.uk 33
Lowest CO2 emissions TV campaign 34
Energy Efficiency: Turning obligation into opportunity EEC/CERT Programmes DEFRA estimate of 1.2bn industry cost under EEC2 (British Gas 1/3) This doubles under CERT (2008-2010) What has this given us Innovation in delivery Cost…
Green Streets A year-long national social experiment to demonstrate how to make homes more energy efficient through behavioural changes and installing energy efficient products launched to national media in early October. Working…
Energy for Tomorrow Badge Mark The green badge mark will signify that any product, service or programme that bears this logo will reduce CO2 emissions Where you see this badge, you can be confident that the product or service…
Moving forward Driving business activities forward with continued momentum Increased focus on technology innovation Strong pipeline of low carbon products and services Use of CERT to drive advantage, innovation and brand Further…
Sarwjit Sambhi Director of UK Power and Renewables Centrica Energy 39
Market Environment (2) Oxera/DTI View of Delivery under the Banded RO 80 Other Biomass Co-Firing 70 LFG Onshore Wind Offshore Wind 60 Target Generation TWh 50 40 30 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014…
Leader in low carbon generation in the UK Carbon intensity of generation portfolio of major suppliers 900 800 EDF 700 SP CO2 g/kWh 600 SSE RWE 500 E.ON 400 Centrica 300 2005 2008 2011 2014 Source: Centrica…
Continued investment in low carbon generation Eston Grange IGCC 850 MW (2012+) Roosecote 229 MW Spalding 860 MW Tolling Contract with InterGen Langage New Build 885 MW (Q1 2009) 43
Growing portfolio of wind power 1.6GW Glens of Foudland Inner 26MW Braes of Doune Lynn 72MW Dowsing Operational 50/50 JV with Airtricity 194 MW Operational Offshore Wind Round 1 Construction 2007/8 Lincs 250 MW Offshore Wind…
North America DE Renewable Portfolio Direct Energy has one of lowest carbon intensity generation Contract/ Size/ Project versus competitors in our key Sponsor term Status markets 1.2GW of owned generation Buffalo Gap 120 MW/15…
Climate policy UK / Europe US Canada UK Renewable Obligation State renewables Provincial carbon Scheme 29 States with Renewable First compliance market 2002-27 Portfolio Standards (RPS) or in Alberta effective July 10% renewable…
Summary We are a leader in low carbon generation We continue to invest in existing low carbon technologies CCGT and wind Future investment underpinned by current policy 47 47
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