The annual materiality assessment is the basis for determining the report content and is performed before the Integrated Report is compiled. The assessment is approved by the Board of
Management. The process consists of three steps:
Step 1: Identification of relevant aspects and other topics The goal of the first step is to create a gross overview of relevant CSR topics. In this process, KPN annually updates a comprehensive list of topics based on GRI guidelines and the pilot version of the
Telecommunication Sector Supplement, as published by GRI in 2003. Where relevant, missing topics are added, including topics identified during media scans and stakeholder dialogues.
Following the update of the list, KPN assesses the relevance of each of the topics. Relevant topics are those on which KPN has or can have an impact (inside the organization and in the value chain or society). This is determined based on stakeholder input and KPN’s own experience. The outcome is an overview of all relevant topics.
Step 2: Determining reporting priority
The second step aims to assess the reporting priority of all relevant topics, which is presented graphically and used not only to determine the contents of the Integrated Report but also as input to determine our (CSR) strategy, policies and approach.
KPN determines the reporting priority by reviewing all relevant topics on: (1) significance of the topic for KPN and (2) significance of the topic for key stakeholders. This review is performed using nine criteria, which are relevant to KPN and based on GRI G4. The priority determination is performed twice a year: a preliminary review and a final review including all inputs from stakeholder dialogues and stakeholder surveys performed throughout the year in order to validate the outcomes. The result of this second step is an overview of all material topics for KPN, which is supported by current stakeholder expectations. The materiality chart combines the two aspects schematically. The combination of the horizontal axis (significance to KPN) and the vertical axis (significance to stakeholders) determines the degree of influence that the topic has on our reputation and therefore the reporting priority. KPN divides the results into three categories:
ý Highly material topics: we aim to fulfill a leading role on these topics and translate them into our six CSR themes and two additional themes. We report on these topics in our Integrated Report.
ý Medium material topics: we want to demonstrate our social responsibility regarding these topics. We report on them in our GRI index, additional policy document and/or on our website.
ý Low material topics: these are topics we monitor, but do not report on.
Our materiality determination is based on the complete list of general and sector-specific aspects provided by GRI G4. The highly material and medium material aspects were translated into topics relevant for KPN. In order to see which GRI aspects are translated into KPN topics, please see the cross-reference on the next page.
APPENDICES
Appendix 3. Scope, reporting process and materiality determination
Materiality assessment
Significance to KPN
Significance to stakeholders
Low material topics Medium material topics Highly material topics
Highly material topics Impact of ICT applications on societal issues
For more information on material topics and KPN’s performance, please refer to our GRI Index.
Highly material topic KPN Corresponding GRI G4 aspects Financial performance Economic performance Sustainable employment Employment
Privacy & Security Security ICT infrastructure, Customer privacy Climate & energy Energy, Emissions
Impact of ICT applications
on societal issues Impact of ICT applications, Products and services
Diversity Diversity and equal opportunity
Innovation & investments ICT infrastructure investments, Investment Indirect economic impacts Indirect economic impacts
Reorganization Labor/management relations
Compliance Anti-competitive behavior, Compliance, Anti-corruption, products and services compliance
Medium material topic KPN Corresponding GRI G4 aspects
Training Training and education
Customer loyalty Product and services labeling Safe customer behavior Secure use of products and services,
Customer health & safety
Sustainable suppliers Supplier environmental assessment, Supplier human rights assessment and Supplier labor practices assessment
Electromagnetic fields
and radiation Electromagnetic fields and radiation Human rights and
discrimination Investment, Non-discrimination, Freedom of association and collective bargaining, Child labor, Forced or compulsory labor
Digital participation Digital divide
Health & vitality Occupational health & safety
Equal remuneration Equal remuneration for women and men Ethical complaints
& procedures Labor practices grievance mechanisms, Human rights grievances mechanisms Marketing communications Marketing communications
Resource use Materials
Car fleet Transport
The KPN labeling of low material topics corresponds with GRI G4 aspects one-to-one.
Step 3: Implementation
Based on the priority outcomes of the materiality determination (approved by the BoM), we determine the topics to be addressed in the report, including the scope and aspect boundaries of all material topics. Business units are informed on new and altered topics to be acted and reported on, to prepare reporting systems, enhance internal mechanisms, develop reporting definitions and, where relevant, targets. Timelines are developed and new/altered topics are included in the relevant reporting process mechanisms (financial/HR data management systems or CSR questionnaires).
2G
Second Generation Mobile System, which is based on the GSM universal standard.
3G
Third Generation Mobile System, which is based on the UMTS universal standard.
4G
Fourth Generation Mobile System, a standard for wireless communication delivering high-speed data for mobile phones and data terminals.
A
Access lines
Access lines are the total number of traditional voice and VoIP connections provided to customers of KPN’s Business segment as of the end of the specified period.
ACM
The Dutch Competition Authority (Autoriteit Consument en Markt or ‘ACM’) acts as a regulator in the Netherlands and is responsible for monitoring compliance with anti-trust rules.
ADR
American Depository Receipt.
Adjusted revenues and adjusted EBITDA Adjusted revenues and adjusted EBITDA are derived from revenues (including other income) and EBITDA, respectively, and are adjusted for the impact of restructuring costs and incidentals. Incidentals are non-recurring transactions which are not directly related to day-to-day operational activities over 5 million unless significant for the specific reportable segment.
ADSL (Asymmetric Digital Subscriber Line) With ADSL, transmissions from provider to user take place at a higher speed than from user to provider. ADSL allows high-speed digital communication, including video signals, across an ordinary twisted-pair copper phone line. An ADSL modem is required.
ARPU (Average Revenue Per User) ARPU is the sum of connection fees, monthly fixed subscription revenues, traffic revenues and gross service provider revenues less related discounts during a one-month period, divided by the average number of customers during that month. Gross service provider revenues represent revenues generated by third-party providers. KPN accounts for the net part as gross service provider revenues.
Cloud services
Cloud services are standardized IT capability (services, software or infrastructure) delivered via internet technologies in a pay-per-use, self-service way.
CO2
Carbon dioxide is a gas that is created when fossil fuels such as oil and coal are burned.
Carbon dioxide is a greenhouse gas.
Committed ARPU
Committed ARPU is the monthly fixed fees KPN receives per user, which are included in the customer’s bundle.
Conflict minerals
Conflict minerals are minerals mined under conditions of armed conflicts and human rights issues. These minerals are used in a variety of products, including consumer electronic devices such as mobile phones.
CSAM
Child Sexual Abusive Material
CSR (Corporate Social Responsibility) Corporate Social Responsibility, to KPN, is the integrated vision of entrepreneurship, in which the company takes responsibility and creates value in economic (Profit), ecological (Planet) and social (People) terms. We incorporate CSR into our business and by doing so, take our social responsibility and contribute to societal challenges.
Customer base
Customer base is the total number of subscribers.
D
DEFRA
UK Department for Environment Food &
Rural Affairs. DEFRA published conversion factors to calculate greenhouse gas emissions.
DJSI (Dow Jones Sustainability Index) The Dow Jones Sustainability Index is a collection of indices that track the performance of companies that are frontrunners in terms of CSR. The DJSI is based on an analysis of corporate economic, environmental and social performance. There are several sub-indices based on geographical parameters.
Drop call rate
The drop call rate is the fraction of telephone calls which are cut off unexpectedly as a result of technical issues, measured as a percentage of all calls.
B
BCF (Business Control Framework) The Business Control Framework contains all corporate policies and guidelines that are mandatory for KPN segments and entities. It forms the cornerstone of the governance of the KPN Group.
BiPT (Belgisch instituut voor Postdiensten en Telecommunicatie)
The Belgian Institute for Postal Services and Telecommunications operates as the telecommunications regulator in Belgium.
Broadband
Broadband refers to telecommunication that provides multiple channels of data over a single communications medium, typically using some form of frequency or wave division multiplexing.
BYOD (Bring Your Own Device)
The technology of Bring Your Own Device (BYOD) enables employees to use their own devices (laptops, tablets and smartphones) at the office.
C
CBb (College van Beroep voor het bedrijfsleven)
The Trade and Industry Appeals Tribunal in the Netherlands.
CDMA
Code Division Multiple Access.
CDP
The CDP (formerly Carbon Disclosure Project) is a joint initiative of investors worldwide that questions and benchmarks listed companies on their approach to climate change.
Churn
The number of mobile customers no longer connected to a mobile operator’s network divided by the operator’s customer base.
CISO (Chief Information Security Office) CISO is responsible within KPN for the security of the IT and TI architecture.
Part of this office are the CISO REDteam, KPN’s ethical hacking team and the CERT (Computer Emergency Response Team) that acts in case of a (potential) cyber attack.
Climate neutral
For KPN, climate neutral means operating with zero net CO emissions.
APPENDICES
Appendix 4. Glossary of terms
DSL (Digital Subscriber Line) DSL is a technology for bringing high bandwidth information to homes and small businesses over ordinary copper PSTN lines. The widely used term xDSL refers to different variations of DSL, such as ADSL, HDSL, VDSL and SDSL.
DTA (Telecommunicatiewet) The Dutch Telecommunications Act.
E
EBITDA
Operating result before depreciation and impairments of PP&E and amortization and impairments of intangible assets.
EEIO (Environmentally-extended input output data)
EEIO models estimate energy use and/or GHG emissions resulting from the production and upstream supply chain activities of different sectors and products. The resulting EEIO emissions factors can be used to estimate cradle-to-gate GHG emissions for a given industry or product category. EEIO models are derived by allocating national GHG emissions to groups of finished products based on economic flows between industry sectors.
E-TASC
E-TASC is a worldwide self-audit system for suppliers in the ICT-sector.
E-VPN (Ethernet Virtual Private Network) E-VPN is a VPN that connects two or more offices using IP-VPN and extends the benefits of ethernet technology that has traditionally been confined to the LAN.
F
Fiber-optic cable
Fiber-optic cable is a transmission medium composed of extremely pure and uniform glass. Digital signals are transmitted across fiber-optic cable as pulses of light. While signals transmitted over fiber-optic cable travel at the same speed as those transmitted over traditional copper cable, fiber-optic cable benefits from greater transmission capacity and lower distortion of signals transmitted.
FTE (full-time equivalent)
The equivalent of the number of employees with a full-time contract.
FttH (Fiber-to-the-Home)
FttH is defined as an access network architecture in which the final part of the connection to the home consists of optical fiber.
FttO (Fiber-to-the-Office)
FttO is fiber connection for business customers to the customers’ offices.
FttHA (Fiber-to-the-Home activated) Homes activated is the number of homes that are connected to fiber and have a subscriber with a service provider.
FttHP (Fiber-to-the-Home passed) Homes passed is the number of homes that a service provider has capability to connect through fiber in a service area.
G
GHG (Greenhouse Gas) Protocol The Greenhouse Gas Protocol Initiative is a multi-stakeholder partnership of business, non-governmental organizations (NGOs), governments, and others that develop internationally accepted GHG accounting and reporting standards for organizations.
GHz
GHz is one billion hertz (a unit of frequency).
Green electricity
Green electricity is electricity from renewable sources. KPN only uses wind energy and electricity from biomass that does not compete with food production.
GRI (Global Reporting Initiative) The Global Reporting Initiative is an organization that publishes international guidelines for CSR reporting.
GRIP
GRIP is the integrated risk management system of KPN. It is an acronym for Governance & Compliance, Risk
management, Internal control and Processes.
GPRS
GPRS is an application that enables data packet switching via GSM networks as well as via existing voice communication. GPRS is based on and complements GSM.
H
Hertz
Hertz is a unit of frequency of one cycle per second.
HSDPA (High-Speed Downlink Packet Access)/HSPA+ (Evolved High-Speed Packet Access)
HSDPA and HSPA+ are mobile telephony protocols that, as an evolution of UMTS, are designed to increase the available data rate by a factor 5 or more.
I
i change
The interactive coaching program for companies and their employees, that supports people in changing their behavior in health-related areas.
ICT
Information and Communication Technology.
IPTV
IPTV is a system through which television services are delivered using the internet protocol suite over a packet-switched network such as the internet. iTV (‘Interactieve TV’) is KPN’s IPTV offering in the Netherlands.
IP-VPN (Internet Protocol – Virtual Private Network)
Offers a secured and private network using IP-based infrastructure.
ISDN (Integrated Services Digital Network)
A worldwide digital communications network evolving from existing telephone services. A standard ISDN connection consists of three channels, i.e. two B channels to carry data and voice at a speed of 64 Kbps and one D channel to carry control information at a speed of 16 Kbps.
ISO (International Organization for Standardization)
This organization is responsible for international management standards such as ISO 14001, ISO 140064-1, ISO 27001 and ISO 22301 (mentioned in this report).
ISP (Internet Service Provider) A company that provides individuals and companies access to the internet.
J
JAC (Joint Audit Cooperation)
The JAC is a cooperation of nine European Telecommunication Operators (including KPN) focusing on the social, ethical, and environmental conditions across their supply chains.
K
KPN Classmate
Through the KlasseContact project of the KPN Mooiste Contact Fonds, chronically-ill children can use an ICT-set (a KPN Classmate) to take a ‘virtual seat’ in the classroom.
KPN Mooiste Contact Fonds This KPN foundation supports societal initiatives aimed a stimulating social contact, by combining people and technological resources to the best advantage.
L
LTE (Long-Term Evolution)
LTE, commonly marketed as 4G LTE, is a standard for wireless communication of high-speed data for mobile phones and data terminals.
KPN Mooiste Contact Fonds This KPN foundation supports societal initiatives aimed a stimulating social contact, by combining people and technological resources to the best advantage.
M
Machine to Machine (M2M)
M2M refers to technologies that allow both wireless and wired systems to communicate between devices of the same ability.
Market share
Market share is the percentage or proportion of the total available market that is being serviced by KPN. These figures are based on externally available market data, which may not be completely accurate. These figures are based on externally available market data, which may not be completely accurate, and may partially be based on estimates.
O
Open access
Open access is a model where an operator is required by regulation to provide access to its network to wholesale customers at capped prices.
P
PUE (power usage effectiveness) An international standard for the calculation of energy efficiency of data centers, which compares the total data center electricity consumption with the electricity consumption of equipment used for customer purposes.
PSTN (Public Switched Telephone Network) Traditional telephone system that runs through copper cables (voice up to 64 Kbps, data up to 56 Kbps).
R
RepTrak
RepTrak, developed by the Reputation Institute, is a method to calculate a reputation score of companies.
RGU (Revenue Generating Unit) RGU is the total of all subscribers receiving standard cable, broadband internet or telephony services over KPN’s network at a given date. Thus, one subscriber who receives a bundle of KPN’s services (telephony, internet and TV) would be counted as three RGUs.
Roaming
Transfer of mobile traffic from one network to another, referring to the exchange of international mobile traffic.
S
SAC/SRC
Subscriber acquisition/retention costs is the amount that is spent to acquire or retain subscribers.
Scope 1
Direct greenhouse gas emissions occurring from sources that are owned or controlled by an organization.
Mbps (Megabits per second)
Mbps is a unit of data transfer rate equal to 1 million bits per second. The bandwidths of broadband networks are often indicated in Mbps.
MDF (Main Distribution Frame) access Allows other telecommunication companies to access the local network, enabling them to connect with their customers through our main distribution frame.
MHz (Megahertz)
MHz is one million hertz (a unit of frequency).
MTA/MTR tariff (Mobile Terminating Access tariff)
The tariff charged by mobile operators for the termination of incoming telephone traffic (originating from either a fixed or a mobile network) on their network.
Multi-play
Propositions combining more than one product and / or type of service is considered a mutli-play proposition. Triple-play and quad-play propositions are types of multi-play propositions.
MVNO (Mobile Virtual Network Operator) A mobile operator that does not have its own spectrum or its own network infrastructure.
Instead, MVNOs have business arrangements with ‘traditional’ mobile operators to buy minutes of use to sell to their own customers.
N
Net line gain/loss
Net line gain/loss figures are defined as the difference from one period to the other period in PSTN/ISDN lines plus consumer VoIP plus ADSL only and plus Fiber.
Net adds
Net adds is defined as the difference between the total number of contracts for a specific type of service from one period compare to the previous period.
NPS (Net Promoter Score)
NPS is a tool for measuring customer satisfaction. The key question asked is whether customers would recommend KPN to friends or family.
NWLW (New Way of Living & Working) The New Way of Living & Working means being able to work without the constraints of time and place with the use of modern technology.