Environment

More people means more competition for food, water, energy and natural resources. WWF has estimated that on current projections, humanity will need at least two planets' worth of natural resources by 2050. At the same time, we are all grappling with understanding the scale and nature of the additional challenges presented by climate change through impacts such as extreme weather patterns and water scarcity. These challenges affect people everywhere, with developing countries the most vulnerable.

We operate in more than 70 countries and we are seeing a continuing global recognition of the effects of climate change whether from our investors or by policymakers and how this is starting to change the business landscape. Regulations are emerging - as are the expectations of the people who work at Pearson and who buy our products and services.

All countries have legitimate aspirations to grow and provide opportunity, but that they do so in a sustainable fashion, should be of deep concern to us all.

In the context of this bigger picture, a challenge for educators is how to be effective in helping people to learn to think critically and to find solutions to difficult problems as well as helping foster the leadership necessary to apply this knowledge to drive change. Pearson, as the world's largest learning company, has a role to play in this change not least as the quality of education outcomes is crucial to equip people with the necessary skills.

However, we cannot forget our own environmental footprint. Although it is relatively small compared to that of many industries, reducing our impact is both good for the planet and can often also deliver business benefits. Our two environmental priority issues are climate change and resource use.

Both resonate with a core objective of our business strategy to operate more efficiently and effectively, but also reflect our concern for good environmental stewardship which is shared by many of our stakeholders.

Our changing environmental footprint

Our company is changing. Digital solutions are growing across all our businesses. E-books have reached a tipping point for Penguin; digital revenues are 40% of the total at the FT; and in education, we are changing from being a textbook publisher to a broad-based supplier of education technology and services as well as curriculum materials. These trends mean a changing environmental footprint for us to track and shape.

In 2011, we worked with others in the media sector on an initiative to share experience, to explore the issues and to start to map sustainability relating to our digital footprint. The initiative helped us build an understanding of the shape of our overall digital footprint and where our decisions can have a major influence on it.

One main finding from the work was that while the product footprint of a book is increasingly well understood, there is less visibility on the lifecycle impact of the equivalent digital version. In 2012, we are planning to launch some guidance on this issue for product developers and production departments within Pearson.

Climate change

Reflecting public policy, investor and employee interest in climate change, carbon management is a major focus for us. That does not mean that we think other everyday environmental issues are not important - we encourage recycling in our offices; we've reduced or eliminated certain types of plastic packaging; and unveiled a new electric car charging station at our offices in Austin, Texas.

Our main focus is on our own operations. We had been steadily making reductions in our energy use on a like-for-like basis at about 2% per year but wanted to do a lot better.

So, in 2007, we adopted a target for our then existing operations to become climate neutral by the end of 2009. We achieved this and maintained climate neutrality ever since through:

• A carbon management programme. Primarily, this focuses on improving energy efficiency in our buildings (e.g. more efficient lighting, server virtualisation - which harnesses unused capacity in servers for IT or introducing energy management systems) as well as providing alternatives to business travel, such as upgrading our video conferencing facilities;
• Investing in generation of renewable energy at our sites. We installed solar panels on the roof of our Old Tappan on-demand print centre in 2009 and this year completed a similar installation on the roof of our Cranbury, New Jersey distribution centre. We also installed a wind turbine at our site in Owatonna, Minnesota;
• Purchasing electricity from renewable sources where it is available and affordable to do so, currently covering the US, the UK, India, Mexico and Canada. We are one of the top 50 largest purchasers of green electricity in the United States;
• Establishing partnerships that deliver carbon offsets. Examples include the FT Rainforest in Costa Rica and partnering with the Woodland Trust. Past projects include the 96-acre Penguin Wood in the UK.

Together, these covered around 70% of our impact in 2011. For the balance, we added to the Pearson Rainforest, building on the existing FT Rainforest in Costa Rica. We continue to include businesses acquired in the scope of the climate neutral commitment.

The primary purpose of the climate neutral commitment is to focus people within Pearson on reducing our own environmental impact. This it has done, as the savings in our buildings and from reduced business travel are running at three times the level we achieved prior to adopting our climate neutral commitment.

We reported an absolute climate footprint 7% reduction in 2010 and reduced this by a further 5% in 2011. This cumulative reduction of 12% in two years is a major achievement as we also continue to grow both by acquisition and organically.

Many of our people are passionate about green issues and have become actively engaged. We have a network of around 40 green teams at larger Pearson locations around the world. We use Planet Pearson as our internal global green brand and have a dedicated space on green issues as an integral part of our new online collaboration platform. This allows people around the world to share ideas and perspectives.

The next phase of our climate neutral work involves understanding and mapping our climate impact across our supply chain. There is no agreed methodology for this, so we have set out to work with industry partners to develop a common methodology. Penguin in theUKis leading the way in this field and throughout 2011 has been road-testing a carbon footprint tool, while our businesses inNorth Americahave also mapped the carbon footprint relating to paper purchase. In 2012, we will be looking at how we can expand this work.

Resource use

Paper for our books, magazines and newspapers is the most significant natural resource we use in our business. Our section on supply chain management describes our approach to responsible paper purchase. Over the last few years, we have focused on improving our resource efficiency. Through initiatives such as using the whole tree rather than part of the tree in the papers we purchase, reducing the base weight of the papers we use and custom publishing, we have made huge strides in this area.

Our progress is significant. In the last four years, excluding digital products, we have reduced the paper usage intensity by 27%. This continues to be a focus for us.

Environmental management

Pearson has had an environmental policy since 1992. Our businesses in the UK are accredited against ISO 14001, the international environmental management standard, and the businesses in Australia also achieved accreditation in 2011. We will introduce this into other countries or businesses by consulting local business heads and stakeholders. Other parts of the world apply our own environmental management system, which we describe on our website.

We have also embraced LEED, the green buildings standard in the United States and our UK operations are accredited against the Carbon Trust Standard.

Engaging others

Getting Pearson people involved in our environmental work has always been an important objective for us. Staff-led initiatives include:

• Green/Eco Teams. We have 40 groups of volunteers in place in Pearson buildings in the UK, the US, Canada, Australia, South Africa and India;
• Planet Pearson is now available globally. This site offers ideas for carbon reductions, links to local green groups and performance reports.
• We launched the Planet Pearson Environmental Awards in 2011 as a way to recognise and encourage green innovation across the company

Our books, magazines and newspapers continue to cover climate change as an issue and have developed some innovative ways to provoke debate, inspire action and celebrate success.

External assurance statement

Pearson commissioned Corporate Citizenship to provide external assurance of its 2011 global environmental data. This data is documented in the environment section of the Pearson 2011 report "Our Impact on Society."

We have reviewed the 2011 global environmental data, including energy use (electricity and fossil fuel), business travel, water use and corporate greenhouse gas emissions for Pearson's operations in the United Kingdom, United States, Canada, Australia and China in order to verify that the reported data has not been misstated.

Pearson's corporate greenhouse gas emissions have been reviewed in accordance with the World Resources Institute/World Business Council on Sustainable Development Greenhouse Gas Protocol Guidelines (WRI/WBCSD GHG Protocol).

Based on the work performed, which is outlined in our full assurance statement available on the Pearson website, nothing has come to our attention to indicate that Pearson's global environmental data is not, in all material respects, appropriately reported.

Corporate Citizenship, 2012

Plans

Climate neutrality	Maintain our climate neutral commitment for 2011		Achieved	Maintain our climate neutral commitment for 2012
Carbon reduction	Continuation of our programme to make our key buildings energy efficient with a particular focus on on-site renewable energy generation.		Achieved. Installed solar panels on Cranbury roof and wind turbine in Owatonna	Continuation of our programme to make our key buildings energy efficient with a particular focus on on-site renewable energy generation. We are planning a Phase II Solar Panel Project at Old Tappan and a wind turbine in Iowa City.
Carbon mapping	Continue work on mapping complete carbon footprint for Pearson businesses in the UK and the US		Ongoing. The UK has an online product carbon assessment tool in place.	Continue work on mapping the total carbon footprint for Pearson businesses in the UK and the US
Reuse/recycle rate	Maintain our reuse/recycle rate for all unsold books and newsprint in excess of 95%		Achieved	Maintain our reuse/recycle rate for all unsold books and newsprint in excess of 95%
Targets	Publish energy, water and other environmental targets once 2010 environmental audit completed		Achieved. Process and plans	Publish energy, water and other environmental targets once 2011 environmental audit fully completed and environmental review published
Environmental management	Complete ISO 14001 certification in Australia and identify additional businesses to start the process in 2011		Achieved. Australia certified. Discussions underway in the United States	To complete the due diligence phase and to confirm whether to go ahead with ISO14001 certification in the United States in 2012
Collaboration	Extend access to Planet Pearson, our online green collaboration tool globally		Achieved	One year in, to review the effectiveness of Planet Pearson at reaching and informing employees.
Awards	Further encourage innovation by launching an internal awards scheme to recognise good environmental practice		Achieved. Planet Pearson Environment Awards launched and winners announced	Review Planet Pearson Environment Awards in 2012
Video - conferencing	Encourage alternatives to travel		Achieved. Invested in video conferencing at 22 sites	Further review of global implementation to reduce travel. Extend video conferencing to a further 10 sites in 2012.

  Target achieved
  Target ongoing